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Comparison of Definition of Deposit under Companies Act, 1956 & Companies Act, 2013

Companies(Acceptance of Deposits)Rules, 1975 Companies(Acceptance of Deposits)Rules, 2014 Changes in the New Act.
Definition: (Rule 2 (b) )   Deposit means any deposit of money with, and includes any amount borrowed by, a company Definition:  (Sec 2(31) of Companies Act, 2013 read with Rule 2(1)(c)) Deposit includes any receipt of money by way of deposit or loan or in any other form, by a company -
Exclusions from the definition of deposits are provided under point no. 1 to 10. Exclusions from the definition of deposits are provided under point no. 1 to 11.
1. Amount received from :
  • Central Govt (“CG”) or State Govt (“SG”),
  • any other source which is guaranteed by CG OR SG
  • local authority
  • foreign government or foreign citizen, authority or person
1. Amount received from :
  • CG or SG,
  • any other source which is guaranteed by CG OR SG
  • local authority
  • Statutory Authority
  • Foreign Govt.
  • Foreign Banks,
  • Multilateral financial institutions
  • Developmental financial institutions owned by Foreign Governments
  • Foreign export credit agencies
  • Foreign collaborators
  • Foreign bodies corporate and citizens
  • Foreign authorities
  • Persons resident outside India
Additional exclusions:
  • Statutory Authority
  • Foreign Banks
  • Multilateral financial institutions
  • Developmental financial institutions owned by Foreign Governments
  • Foreign export credit agencies
  • Foreign collaborators
  • Foreign bodies corporate
  • Persons resident outside India
2. Loan from
  • Banking Co.
  • SBI or its subsidiaries
  • Banking Institutions notified by CG
  • Co-operative Bank
2. Loan from
  • Banking Co.
  • SBI or its subsidiaries
  • Banking Institutions notified by CG
  • Co-operative Bank
   
  • No change
3. Loan from:
  • IFCI
  • SFC (State Financial Corp)
  • Shipping Development Fund Committee
  • UTI
  • IDBI
  • Electricity Board
  • LIC
  • Rehabilitation Industries Corporation of India Ltd
  • State Trading Corporation of India Ltd.
  • Minerals and Metals Trading  Corporation of India Limited
  • Rural Electrification Corporation Limited
  • Agricultural Finance Corporation Limited
  • Industrial Reconstruction Corporation of India Limited
  • Industrial Credit and Investment Corporation of India Limited
  • National Industrial Development Corporation of India Limited
  • Tamil Nadu Industrial and Investment Corporation Limited
  • State Industrial and Investment Corporation of Maharashtra Limited
  • GIC and its Subsidiaries
  • Gujarat Industrial Investment Corporation Limited
  • financial company wholly owned by the CG or SG
  • Oil Industry Development Board
  • HDFC
  • Public Financial Institutions notified by CG
3. Loan or Financial assistance from
  • Public Financial institutions notified by CG
  • Insurance companies
  • Scheduled Banks
  • Regional Financial Institutions
 
  • Now the list is more simplified. All the institutions will fall under the purview of Public Financial Institutions and Regional Financial Institutions.
   
4. Amount received
  • by way of security or
  • as an advance from any purchasing agent, selling agent, or other agents.
  • as an advance received against orders for the supply of goods or properties or for the rendering of any service
4. Amount received:
  • by issue of Commercial paper
  • any other instruments as per the guidelines of RBI.
  • as an advance for the supply of goods or provision of services,
  • as advance as consideration for property under agreement or arrangement,
  • security deposit for performance of a contract
  • Advance received under long term project for supply of capital goods.
  • Advance for supply of goods or provision of services needs to be appropriated against the same within 365 days. Otherwise the advance shall fall under the purview of deposits.
5. Amount received from another company 5. Amount received from another company
  • No change
6. Security Deposit received from an employee 6. Non-interest bearing Security deposit received from employee not exceeding his annual salary
  • Security Deposit is limited to employee’s annual salary
7. Amount received by way of:
  • subscriptions to shares,
  • bonds, stock or debentures.
  Bonds or Debentures are to be secured by a mortgage on immovable property.
7. Amount raised by way of :
  • issue of bonds or debentures
  • subscription of securities
  Bonds and debentures need to be secured by a first charge on the assets specified under Schedule III  excluding intangible assets
  • If the securities are not allotted within 60 days from the date of receipt of application money or advance then the Company has to refund the amount within 15 days from the completion of 60 days.
8. Amount received in trust or in transit 8. Non-interest bearing amount received or held in trust.
  • The word transit is omitted
9. Amount received by a Private Co. from director, relative of director or member.   Declaration by director or member that the funds are not borrowed or accepted from others is necessary. 9. Amount received by a company from director,   Declaration by director that the funds are not borrowed or accepted from others is necessary
  • Apart from private companies, now even public company can accept the amount from Directors which will not be considered as deposit.
  • Also the new provision has removed relatives of directors and members from the ambit of the rule.
10. Unsecured Loans bought in by the promoters subject to:
  • The loans are utilized as per the stipulations laid down by the financial institutions
  • The loans are provided by the promoters and/or by their relatives. Friends and business associates are not included for this purpose
  • The above two exemptions are available only till the loans are repaid.
10. Unsecured Loans bought in by the promoters subject to:
  • The loans are utilized as per the stipulations laid down by the financial institutions
  • The loans are provided by the promoters and/or by their relatives. Friends and business associates are not included for this purpose
  • The above two exemptions are available only till the loans are repaid
     
  • No change
11. Amount accepted from a Nidhi Co.
  • New Rule included.
 
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