Acceptance of Deposits from Public (Sec. 76) — Complete Compliance Framework

# Acceptance of Deposits from Public (Sec. 76)

This section covers the end-to-end compliance framework an eligible public company must follow when accepting deposits from the public.

## 1. Credit Rating

• Obtain rating (assessing net worth, liquidity, and ability to repay on due date) from a recognized credit rating agency.
• Disclose the rating in deposit invitation.
• Renew rating annually and file with ROC in Form DPT-3.
• Rating must be at least investment grade.

## 2. Creation of Charge on Assets

• Create charge on tangible assets within 30 days of accepting deposits.
• Security value should not be less than (Deposit + Interest payable).
• Cannot create charge on intangible assets (e.g., goodwill, trademarks).
• Market value of charged assets to be assessed by a Registered Valuer.
• Security shall be created in favour of a Trustee for depositors on specific movable/immovable property.

## 3. Tenure of Deposits

• NOT repayable on demand.
• Tenure: Minimum 6 months — Maximum 36 months.
• Short-term exception (< 6 months) permitted if BOTH:
• Deposits ≤ 10% of (PUSC + FR + SP), AND
• Minimum tenure ≥ 3 months.

## 4. Trustee for Depositors

• Mandatory to appoint one or more trustees.
• Written consent required before appointment.
• Advertisement must state that the trustees have consented.
• A Deposit Trust Deed in Form DPT-2 must be executed at least 7 days before issuing the circular/advertisement.

### Disqualifications — Cannot Be Appointed as Trustee

A person/company cannot be a trustee if they are:

1. A director, KMP, officer, employee, or depositor in the company / its holding / subsidiary / associate.

2. Indebted to the company or its related entities.

3. Having a significant financial relationship with the company.

4. A guarantor for the principal or interest.

5. Related to any person mentioned above.

### Removal of Trustee

• Trustee cannot be removed mid-term without the consent of all directors present at a Board meeting.
• If the company has independent directors — at least 1 ID must be present at such Board meeting.

### Calling Depositors' Meeting (by Trustee)

Trustees must call a depositors' meeting when:

• 1/10th of depositors (by value) request it, OR
• Default or any event affecting depositors' interests occurs.

## 5. Maximum Deposit Limits

## 6. Issuance of Circular / Advertisement

• Use Form DPT-1.
• Publish in English + Vernacular newspapers with wide circulation.
• Upload on company's website.
• File with ROC 30 days before issue.
• Validity of circular: 6 months after FY closure OR AGM actual date OR AGM due date (if AGM not held), whichever is earlier.

## 7. Deposit Repayment Reserve Account (DRRA)

• Deposit 20% of deposits maturing during the FY by 30th April in a scheduled bank.
• Maintain at least 20% throughout the FY.

## 8. Interest Rate & Brokerage

• Both cannot exceed RBI's prescribed rates for NBFCs.
• Brokerage paid only to authorised agents who procure deposits.

## 9. Premature Repayment

• 1% interest reduction (if requested after 6 months).
• Excluded: Rule 3 compliance or war-risk benefits.

## 10. Register of Deposits

Every company accepting deposits must maintain separate registers at its registered office:

### Particulars to Record

• Name, address, PAN of depositor(s).
• Guardian's details (if minor).
• Nominee details.
• Deposit receipt number.
• Date and amount of each deposit.
• Duration & repayment date.
• Interest rate, due dates, TDS instructions.
• Security/charge details.

### Timing & Preservation

• Entries within 7 days of issuing deposit receipt.
• Authenticated by a Director / CS / authorised officer.
• Preserve for at least 8 years from FY of last entry.

## 11. Other Compliances

• Declaration that deposit funds are not borrowed.
• Joint accounts allowed (max 3).
• Nomination available.
• Deposit receipt within 21 days of receipt/cheque realisation/renewal.
• File audited return in DPT-3 by 30th June each year.
• 18% p.a. penal interest for delayed repayment.
• Terms cannot be changed to detriment of depositors.

## 12. Punishment for Contravention

Company and every officer-in-default — Fine up to ₹5,000 + ₹500/day for continuing default.