Acceptance of deposits

As per Section 2(31), â??depositâ?? includes any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India. Accordingly, Rule 2(1)(c) of Companies (Acceptance of Deposit) Rules, 2014, excludes the following amount received by a Company from the ambit of Deposit and shall not be considered as deposits â?? ( only relevant part of rules for explanation is taken here) - any amount received against issue of commercial paper or any other instruments; - Any amount raised by the issue of bonds or debentures secured by a first charge or a charge ranking pari passu with the first charge, compulsorily convertible within 10 years; - Any amount raised by issue of Unsecured Non-convertible debentures; Hence Unsecured debentures or bonds are not covered under deposits.

Sruthi Putta

Qualified CA

★ 10

03-Apr-20 00:19

Unsecured debenture/bonds shall be treated as deposits. But There are some exceptions covered in rules. 1. If debentures/bonds are compulsorily convertible into shares within 10 years then they shall not be considered deposits ((Rule 2 (ix) of Companies (Acceptance of Deposits) Rule, 2014)). 2. Unsecured non convertible debentures listed on stock exchange as per SEBI regulations (Rule 2(ixa)) shall not be considered as deposits.

CA YOGITA HARJANI

Faculty

04-Apr-20 11:52

Thank you yogita mam. I clearly understood. Ur explaination in class as well as in queries is very clear. Tq

Thread Starter

Star Ca

CA Inter

★ 3K+

05-Apr-20 11:40