# Acceptance of Deposits by Companies — Introduction
## What is a Deposit?
A deposit (also called Public Deposit or Fixed Deposit) is a form of borrowing undertaken by companies to raise funds. Key features:
- It is a mode of raising finance, alternative to issuing shares/debentures or borrowing from banks.
- Deposits may be secured or unsecured.
- Repayment is time-bound (the company must repay on the agreed maturity).
## Governing Law
The acceptance of deposits is regulated primarily by:
| Provision | Subject Matter |
|---|---|
| Section 73, Companies Act, 2013 | Acceptance of deposits from members |
| Section 76, Companies Act, 2013 | Acceptance of deposits from public by eligible companies |
| Companies (Acceptance of Deposits) Rules, 2014 | Procedural framework, limits, conditions |
These provisions prescribe the limits, the manner, and the conditions subject to which deposits can be invited and accepted.
## Who do Sections 73 & 76 NOT apply to?
These sections are not applicable to the following companies (they are governed by their own specialised regulators/norms):
1. Banking Companies (regulated by RBI under Banking Regulation Act)
2. Non-Banking Financial Companies (NBFCs) (regulated by RBI)
3. Housing Finance Companies (regulated by NHB/RBI)
4. Any other class of companies notified by the Central Government from time to time
> Memory aid: "BNH + Notified" — Banks, NBFCs, Housing Finance + any class notified by CG.
## Who can accept deposits from whom?
| Type of Company | From Members | From Public |
|---|---|---|
| Private Company | Yes (Section 73) | No |
| Public Company (non-eligible) | Yes (Section 73) | No |
| Eligible Public Company | Yes (Section 73) | Yes (Section 76) |
## Snapshot for exam recall
- Sections 73 & 76 + Rules 2014 = the framework for Non-Banking Non-Financial companies (e.g., trading, manufacturing).
- A private company can accept deposits only from its members.
- A public company can accept from members; only an eligible public company can accept from the public.