## Deposit Repayment Reserve Account (DRR)

When a company accepts deposits from members or the public, it must safeguard depositors by parking a portion of money in a separate reserve account.

### Key requirements

When to deposit: On or before 30th April of each year.
How much: A sum not less than 20% of the amount of deposits maturing during the following financial year.
Where to deposit: In a scheduled bank in a separate account called the Deposit Repayment Reserve Account (DRR).

### Use of DRR

The sum standing to the credit of DRR can be used only for repayment of deposits.
The balance in DRR shall not fall below 20% of the amount of deposits maturing during the financial year.

### Important point

DRR is a statutory cushion — it cannot be used for any other purpose (working capital, payment of dividend, etc.).
Failure to maintain DRR is a contravention attracting penalty under the Act.

Worked example

### Example 1

Example: ABC Ltd. has accepted deposits of various tenures. Out of these, deposits of ₹50 lakh are scheduled to mature during FY 2026-27. What amount must ABC Ltd. transfer to DRR and by when?

Answer: ABC Ltd. must transfer at least 20% of ₹50 lakh = ₹10 lakh to the Deposit Repayment Reserve Account opened with a scheduled bank, on or before 30th April 2026. The amount must remain at not less than ₹10 lakh through the year.

⚠️ Common exam mistakes

Calculating DRR on the total deposits outstanding instead of only on deposits maturing in the following financial year.
Treating DRR as optional or as a mere book entry — it requires actual deposit into a separate scheduled-bank account.
Forgetting the strict deadline of 30th April; depositing later in the year is non-compliance.
Confusing DRR (under deposits law) with DRR under debentures (Debenture Redemption Reserve) — they are different statutory reserves.

Bare-Act text Section 73(2)(c) · Companies Act, 2013 read with Rule 13 of Companies (Acceptance of Deposits) Rules, 2014 · click to expand

Where a company accepts deposits from its members, it shall on or before the 30th day of April each year deposit, in a separate bank account maintained with a scheduled bank, a sum which shall not be less than twenty per cent of the amount of its deposits maturing during the following financial year, and kept in such account to be called as deposit repayment reserve account.

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