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1 PUBLIC DEPOSIT 58A-PUBLIC DEPOSIT NOT TO BE INVITED WITHOUT ISSUING AN ADVERTISEMENT.

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Presentation on theme: "1 PUBLIC DEPOSIT 58A-PUBLIC DEPOSIT NOT TO BE INVITED WITHOUT ISSUING AN ADVERTISEMENT."— Presentation transcript:

1 1 PUBLIC DEPOSIT 58A-PUBLIC DEPOSIT NOT TO BE INVITED WITHOUT ISSUING AN ADVERTISEMENT

2 2 Provision: 1[58A. Deposits#02 not to be invited without issuing an advertisement] 1[58A. Deposits#02 not to be invited without issuing an advertisement] (1) The Central Government may, in consultation with the Reserve Bank of India, prescribe the limits up to which, the manner in which and the conditions subject to which deposits may be invited or accepted by a company either from the public or from its members. (1) The Central Government may, in consultation with the Reserve Bank of India, prescribe the limits up to which, the manner in which and the conditions subject to which deposits may be invited or accepted by a company either from the public or from its members. (2) No company shall invite, or allow any other person to invite or cause to be invited on its behalf, any deposit unless- (a)such deposit is invited or is caused to be invited in accordance with the rules made under sub- section (1), #03[* * *] (a)such deposit is invited or is caused to be invited in accordance with the rules made under sub- section (1), #03[* * *] (b)an advertisement, including (b)an advertisement, including therein a statement showing the financial position of the company, has been issued by the company in such form and in such manner as may be prescribed #05[, and] therein a statement showing the financial position of the company, has been issued by the company in such form and in such manner as may be prescribed #05[, and] #06[(c)the company is not in default in the repayment of any deposit or part thereof and any interest thereupon in accordance with the terms and conditions of such deposit.] #06[(c)the company is not in default in the repayment of any deposit or part thereof and any interest thereupon in accordance with the terms and conditions of such deposit.]

3 3 b) No deposit referred to in clause(a) shall be renewed by the company after the expiry of the term thereof unless the deposit is such that it could have been accepted if the rules made under sub-section (1) were in force at the time when the deposit was initially accepted by the company. b) No deposit referred to in clause(a) shall be renewed by the company after the expiry of the term thereof unless the deposit is such that it could have been accepted if the rules made under sub-section (1) were in force at the time when the deposit was initially accepted by the company. (3)(a) Every deposit accepted by a company at any time before the commencement of the Companies (Amendment) Act, 1974 (14 of 1974) in accordance with the directions made by the Reserve Bank of India under Chapter IIIB of the Reserve Bank of India Act, 1934 (2 of 1934), shall, unless renewed in accordance with clause (b), be repaid in accordance with the #07[terms and conditions of such deposit] (3)(a) Every deposit accepted by a company at any time before the commencement of the Companies (Amendment) Act, 1974 (14 of 1974) in accordance with the directions made by the Reserve Bank of India under Chapter IIIB of the Reserve Bank of India Act, 1934 (2 of 1934), shall, unless renewed in accordance with clause (b), be repaid in accordance with the #07[terms and conditions of such deposit] 08[(3A) Every deposit accepted by a company after the commencement of the Companies (Amendment) Act, 1988, shall, unless renewed in accordance with the rules made under sub- section (1), be repaid in accordance with the terms and conditions of such deposit.] 08[(3A) Every deposit accepted by a company after the commencement of the Companies (Amendment) Act, 1988, shall, unless renewed in accordance with the rules made under sub- section (1), be repaid in accordance with the terms and conditions of such deposit.]

4 4 4.Where any deposit is accepted by a company after the commencement of the Companies (Amendment) Act, 1974 (41 of 1974), in contravention of the rules made under sub-section (1), repayment of such deposit shall be made by the company within thirty days from the date of acceptance of such deposit or within such further time, not exceeding thirty days, as the Central Government may, on sufficient cause being shown by the company, allow. 4.Where any deposit is accepted by a company after the commencement of the Companies (Amendment) Act, 1974 (41 of 1974), in contravention of the rules made under sub-section (1), repayment of such deposit shall be made by the company within thirty days from the date of acceptance of such deposit or within such further time, not exceeding thirty days, as the Central Government may, on sufficient cause being shown by the company, allow. 5. Where a company omits or fails to make repayment of a deposit in accordance with the provisions of clause (c) of sub-section (3), or in the case of a deposit referred to in sub-section (4), within the time specified in that sub-section,- 5. Where a company omits or fails to make repayment of a deposit in accordance with the provisions of clause (c) of sub-section (3), or in the case of a deposit referred to in sub-section (4), within the time specified in that sub-section,- (a)the company shall be punishable with fine which shall not be less than twice the amount in relation to which the repayment of the deposit has not been made, and out of the fine, if realised, an amount equal to the amount in relation to which the repayment of deposit has not been made, shall be paid by the Court, trying the offence, to the person to whom repayment of the deposit was to be made, and on such payment, the liability of the company to make repayment of the deposit shall, to the extent of the amount paid by the Court, stand discharged; (a)the company shall be punishable with fine which shall not be less than twice the amount in relation to which the repayment of the deposit has not been made, and out of the fine, if realised, an amount equal to the amount in relation to which the repayment of deposit has not been made, shall be paid by the Court, trying the offence, to the person to whom repayment of the deposit was to be made, and on such payment, the liability of the company to make repayment of the deposit shall, to the extent of the amount paid by the Court, stand discharged;

5 5 b)Every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to five years and shall also be liable to fine. b)Every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to five years and shall also be liable to fine. #09(6) Where a company accepts or invites, or allows or causes any other person to accept or invite on its behalf, any deposit in excess of the limits prescribed under sub-section (1) or in contravention of the manner of condition prescribed under that sub-section or in contravention of the provisions of sub-section (2), as the case may be: 7)(a) Nothing contained in this section shall apply to,- 7)(a) Nothing contained in this section shall apply to,- (i)a banking company, or (ii)such other company as the Central Government may, after consultation with the Reserve Bank of India, specify in this behalf. (b) Except the provisions relating to advertisement contained in clause (b) of sub-section (2),#12 nothing in this section shall apply to such classes of financial companies as the Central Government may, after consultation with the Reserve Bank of India, specify in this behalf.

6 6 [(8) The Central Government may, if it considers it necessary for avoiding any hardship or for any other just and sufficient reason, by order, issued either prospectively or retrospectively from a date not earlier than the commencement of the Companies (Amendment) Act, 1974 (41 of 1974), grant extension of time to a company or class of companies to comply with, or exempt any company or class of companies from, all or any of the provisions of this section#14 either generally or for any specified period subject to such conditions as may be specified in the order: [(8) The Central Government may, if it considers it necessary for avoiding any hardship or for any other just and sufficient reason, by order, issued either prospectively or retrospectively from a date not earlier than the commencement of the Companies (Amendment) Act, 1974 (41 of 1974), grant extension of time to a company or class of companies to comply with, or exempt any company or class of companies from, all or any of the provisions of this section#14 either generally or for any specified period subject to such conditions as may be specified in the order: Provided that no order under this sub-section shall be issued in relation to a class of companies except after consultation with the Reserve Bank of India.] Provided that no order under this sub-section shall be issued in relation to a class of companies except after consultation with the Reserve Bank of India.]

7 7 [(9) Where a company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the #16[Tribunal] may, if it is satisfied, either on its own motion or on the application of the depositor,#17 that it is necessary so to do to safeguard the interests of the company, the depositors or in the public interest, direct, by order, the company to make repayment of such deposit#18 or part thereof forthwith or within such time and subject to such conditions as may be specified in the order: [(9) Where a company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the #16[Tribunal] may, if it is satisfied, either on its own motion or on the application of the depositor,#17 that it is necessary so to do to safeguard the interests of the company, the depositors or in the public interest, direct, by order, the company to make repayment of such deposit#18 or part thereof forthwith or within such time and subject to such conditions as may be specified in the order: Provided that the #19[Tribunal] may, before making any order under this sub-section, give a reasonable opportunity of being heard to the company and the other persons interested in the matter. Provided that the #19[Tribunal] may, before making any order under this sub-section, give a reasonable opportunity of being heard to the company and the other persons interested in the matter.

8 8 (10) Whoever fails to comply with any order made by the #20[Tribunal] under sub-section (9) shall be punishable with imprisonment which may extend to three years and shall also be liable to a fine of #21[not less than rupees five hundred] for every day during which such non- compliance continues.] (11) A depositor may, at any time, make a nomination#23 and the provisions of sections 109A and 109B shall, as far as may be, apply to the nomination made under this sub-section.] (11) A depositor may, at any time, make a nomination#23 and the provisions of sections 109A and 109B shall, as far as may be, apply to the nomination made under this sub-section.] Explanation.-For the purposes of this section, "deposit" means any deposit of money with, and includes any amount borrowed by, a company but shall not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India. Explanation.-For the purposes of this section, "deposit" means any deposit of money with, and includes any amount borrowed by, a company but shall not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India.

9 9 #01Inserted by Act 41 of 1974, section 7, w.e.f #01Inserted by Act 41 of 1974, section 7, w.e.f #02See Companies (Acceptance of Deposits) Rules, #02See Companies (Acceptance of Deposits) Rules, #03The word "and" omitted by the Companies (Amendment) Act, 1996, w.e.f #03The word "and" omitted by the Companies (Amendment) Act, 1996, w.e.f #04See The Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, #04See The Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, #05Inserted by the Companies (Amendment) Act, 1996, w.e.f #05Inserted by the Companies (Amendment) Act, 1996, w.e.f #06Ibid. #06Ibid. #07Substituted by the Companies (Amendment) Act, 1988, section 9, w.e.f for the words "terms of such deposit". #07Substituted by the Companies (Amendment) Act, 1988, section 9, w.e.f for the words "terms of such deposit". #08Inserted by the Companies (Amendment) Act, 1988, section 9, w.e.f #08Inserted by the Companies (Amendment) Act, 1988, section 9, w.e.f #09Powers delegated to Chief Officer, Deputy Chief Officer and Assistant Chief Officers attached to the Department of Non-Banking Companies, RBI vide Notification No. GSR 473(E), dated #09Powers delegated to Chief Officer, Deputy Chief Officer and Assistant Chief Officers attached to the Department of Non-Banking Companies, RBI vide Notification No. GSR 473(E), dated

10 10 #10Substituted for "one lakh rupees" by the Companies (Amendment) Act, 2000, w.e.f #10Substituted for "one lakh rupees" by the Companies (Amendment) Act, 2000, w.e.f #11Substituted for "five thousand rupees" by the Companies (Amendment) Act, 2000, w.e.f #11Substituted for "five thousand rupees" by the Companies (Amendment) Act, 2000, w.e.f #12See The Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, #12See The Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, #13Inserted by Act 46 of 1977, section 3, w.e.f #13Inserted by Act 46 of 1977, section 3, w.e.f #14See Companies (Application for Extension of time or Exemption under sub-section (8) of section 58A) Rules, #14See Companies (Application for Extension of time or Exemption under sub-section (8) of section 58A) Rules, #15Inserted by the Companies (Amendment) Act, 1988, section 9, w.e.f #15Inserted by the Companies (Amendment) Act, 1988, section 9, w.e.f #16Substituted for "Company Law Board" by the Companies (Second Amendment) Act, #16Substituted for "Company Law Board" by the Companies (Second Amendment) Act, #17Application to be made in Form 4 of the Company Law Board Regulations, #17Application to be made in Form 4 of the Company Law Board Regulations, #18Fees prescribed is Rs. 50. On notification of the commencement of the amendment, power will be transferred to the National Company Law Tribunal. #18Fees prescribed is Rs. 50. On notification of the commencement of the amendment, power will be transferred to the National Company Law Tribunal.

11 11 #19Substituted for "Company Law Board" by the Companies (Second Amendment) Act, #19Substituted for "Company Law Board" by the Companies (Second Amendment) Act, #20Ibid. #20Ibid. #21Substituted for "not less than rupees fifty" by the Companies (Amendment) Act, 2000, w.e.f #21Substituted for "not less than rupees fifty" by the Companies (Amendment) Act, 2000, w.e.f #22Inserted by the Companies (Amendment) Act, 1999, w.r.e.f #22Inserted by the Companies (Amendment) Act, 1999, w.r.e.f #23See Form 2B, Companies (Central Government's) General Rules & Forms, 1999, w.e.f #23See Form 2B, Companies (Central Government's) General Rules & Forms, 1999, w.e.f

12 12 Procedure for Inviting and Accepting Public Deposits under Section 58A In view of the provisions of the companies act, 1956 and the companies (Acceptance of Deposits ) Rules, 1975, a company, which proposes to invite and accept deposit from public should comply with the procedural requirements: In view of the provisions of the companies act, 1956 and the companies (Acceptance of Deposits ) Rules, 1975, a company, which proposes to invite and accept deposit from public should comply with the procedural requirements: 1.Authority in Memorandum to borrow funds: 1.Authority in Memorandum to borrow funds: Check if the Memorandum of Association of the company contains provision empowering the company to borrow the funds. Trading companies have implied power of borrowing. If the Memorandum of Association does not give such power to the company, then the Memorandum is required to be altered by incorporating an appropriating object clause therein, for which the general meeting (GM) of the company shall have to be convened and held for passing the special resolution in accordance with the provision of section 17 of the companies Act,1956, before attempting to invite and accept deposit from public. Check if the Memorandum of Association of the company contains provision empowering the company to borrow the funds. Trading companies have implied power of borrowing. If the Memorandum of Association does not give such power to the company, then the Memorandum is required to be altered by incorporating an appropriating object clause therein, for which the general meeting (GM) of the company shall have to be convened and held for passing the special resolution in accordance with the provision of section 17 of the companies Act,1956, before attempting to invite and accept deposit from public.

13 13 CONTINUE: 2.Powers of the board: 2.Powers of the board: Section 291 of the Companies Act, 1956 provides that subject to the provisions of the Act, the Board of directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorized to exercise and do. Section 291 of the Companies Act, 1956 provides that subject to the provisions of the Act, the Board of directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorized to exercise and do. However the Board shall not exercise any power or do any act or things, which is directed or required, whether by the companies Act, or any other Act or by the Memorandum or Article of the company or otherwise, to be exercised or done by the company in general meeting. However the Board shall not exercise any power or do any act or things, which is directed or required, whether by the companies Act, or any other Act or by the Memorandum or Article of the company or otherwise, to be exercised or done by the company in general meeting. Section 292 confers on the Board of Directors of a company power to borrow moneys Otherwise than on Debenture but such powers must exercised by means of resolutions passed at meetings of the Board. Section 292 confers on the Board of Directors of a company power to borrow moneys Otherwise than on Debenture but such powers must exercised by means of resolutions passed at meetings of the Board. According to Section 293(1)(d) of the Act, in order to enable the Board of directors of a company to borrow funds in excess of the paid up share capital and free reserves of the company, consent of the company in general meeting has to be obtained. According to Section 293(1)(d) of the Act, in order to enable the Board of directors of a company to borrow funds in excess of the paid up share capital and free reserves of the company, consent of the company in general meeting has to be obtained. In view of the provisions of sections 291, 292, 293, the company must ensure that, before passing Board resolution for inviting and accepting public deposit under section 292 of the Act, the amount of the proposed deposit together with the amount of existing borrowings, does not exceed the companys paid up share capital and free reserves and if it does, it must convene the general meeting of the shareholders of the company to pass a resolution under section 293(1)(d) of the Act, fixing the limit on the total amount of borrowing. In view of the provisions of sections 291, 292, 293, the company must ensure that, before passing Board resolution for inviting and accepting public deposit under section 292 of the Act, the amount of the proposed deposit together with the amount of existing borrowings, does not exceed the companys paid up share capital and free reserves and if it does, it must convene the general meeting of the shareholders of the company to pass a resolution under section 293(1)(d) of the Act, fixing the limit on the total amount of borrowing.

14 14 CONTINUE: 3.Holding of Board meeting: 3.Holding of Board meeting: Board meeting required to convene to approve the scheme of acceptance of deposits, Amount of deposit, terms and conditions of acceptance, repayment approve the text of advertisement. Board meeting required to convene to approve the scheme of acceptance of deposits, Amount of deposit, terms and conditions of acceptance, repayment approve the text of advertisement. 4. Filing of advertisement with the ROC: 4. Filing of advertisement with the ROC: A copy of the advertisement duly signed by the majority of directors of the company and same required to be filed to the Registrar of Companies for approval of Registration.. A copy of the advertisement duly signed by the majority of directors of the company and same required to be filed to the Registrar of Companies for approval of Registration.. 5.Publication of advertisement: 5.Publication of advertisement: company must publish the advertisement in a leading English newspaper and one in a vernacular( homely language) circulating in the state in which the Registered office of the company is situated. company must publish the advertisement in a leading English newspaper and one in a vernacular( homely language) circulating in the state in which the Registered office of the company is situated. 6.Issue of Application Forms: 6.Issue of Application Forms: An application inviting deposit being attached with the text of advertisement distributed to the public through brokers and intermediaries, the same which must have been prepared strictly in accordance with the provision of rule 5 of the companies ( Acceptance of Deposits ) Rules, 1975 An application inviting deposit being attached with the text of advertisement distributed to the public through brokers and intermediaries, the same which must have been prepared strictly in accordance with the provision of rule 5 of the companies ( Acceptance of Deposits ) Rules, Statement in lieu of Advertisement : 7.Statement in lieu of Advertisement : If a company intends to accept deposit without inviting, it can do so by filing the Statement in lieu of Advertisement With ROC, duly signed by the Directors and containing all the particulars required in the Advertisement If a company intends to accept deposit without inviting, it can do so by filing the Statement in lieu of Advertisement With ROC, duly signed by the Directors and containing all the particulars required in the Advertisement

15 15 CONTINUE: 8.Acceptance of deposit during validity of advertisement: 8.Acceptance of deposit during validity of advertisement: A company can accept deposit / renew during the validity of the advertisement i.e for a period of six months from the date of closure of financial years in which it is issued or until the date on which balance sheet of the company laid before the company in AGM whichever is earlier. A company can accept deposit / renew during the validity of the advertisement i.e for a period of six months from the date of closure of financial years in which it is issued or until the date on which balance sheet of the company laid before the company in AGM whichever is earlier. 9.Issue of deposit Receipt to each Depositor: 9.Issue of deposit Receipt to each Depositor: The company must issue a Receipt of Deposit(signed by the Authorized officer) to all the depositors within 8 weeks from the date of receipt of money or cheques from the depositors. Receipt should contain all the details like names and address of the depositors, date of deposit, Amount received and the interest payable thereon. The company must issue a Receipt of Deposit(signed by the Authorized officer) to all the depositors within 8 weeks from the date of receipt of money or cheques from the depositors. Receipt should contain all the details like names and address of the depositors, date of deposit, Amount received and the interest payable thereon.

16 16 SPECIMEN DEPOSIT RECEIPT (NOT TRANSFERABLE) NAME OF THE COMPANY Regd Office: _____________________________ Fixed Deposit Receipt No________________ for Rs_______________________ Repayable on ______________________ Received from _____________________________________________________ Name and Address(es) of depositors(s)] ________________________________________________________________________ the sum of rupees ________________ on __________________ as a deposit for _________________ years from the ______________ day of _________________ 20_ _ bearing interest at _________________ percent per annum payable half yearly on __________ and _________________ each year. Date: For ABC Company Ltd Company secretary Company secretary Authorised Signatory Authorised Signatory NOTE: This receipt is subject to the terms and conditions of the fixed deposit scheme of the company.

17 17 REVERSE OF THE RECEIPT Received from ….. co Ltd ______________________________________ this _________________ day of ____________________ 20_ _ Princcipal Rs_________________________________________________ Interest Rs___________________________________________________ Total Rs ____________________________________________________ Signature(S) of Depositor(S) ____________________________________ Revenue Stamp Stamp Name and Address ________________ ________________

18 18 CONTINUE: 10.Entry in the Register(s) of Deposit: 10.Entry in the Register(s) of Deposit: Details of the depositors are entered in the Register: Details of the depositors are entered in the Register: Name and Adress of the depositors Name and Adress of the depositors Date and Amount of deposit Date and Amount of deposit Duration of the deposit and the date of maturity Duration of the deposit and the date of maturity Rate of interest and date of payment Rate of interest and date of payment Any other information. Any other information. 1.Filing of Return of deposit: 1.Filing of Return of deposit: Return of deposit must be filed witgh the registrar on or before 30th june of each year, in the manner prescribed in the companies deposit Rules, 1975 and furnish the same as on 31st of March duly certified by the Auditors. Return of deposit must be filed witgh the registrar on or before 30th june of each year, in the manner prescribed in the companies deposit Rules, 1975 and furnish the same as on 31st of March duly certified by the Auditors. 12. Copy to RBI 12. Copy to RBI copy of Return of Deposit also be filed with the RBI ( Reserve bank of India ) copy of Return of Deposit also be filed with the RBI ( Reserve bank of India ) 13.Payment of Interest on Deposit and Repayment of Deposit: 13.Payment of Interest on Deposit and Repayment of Deposit: Repayment of deposit and interest thereon must be paid in accordance with the terms and condition on which deposit have been accepted. Repayment of deposit and interest thereon must be paid in accordance with the terms and condition on which deposit have been accepted.

19 19 CONTINUE: 14. Premature Repayment of deposit: 14. Premature Repayment of deposit: company must make premature repayment of deposit, if and when a depositor approaches the company, strictly according to the provisions of rule 8(1) of the said rules which provides that barring the exception contained in the proviso to the sub rule, where the company makes repayment of a deposit after the expiry of six months from the date of such deposit but before the expiry of such deposit was accepted by the company, the rate of interest payable by the company on such deposit, shall be reduced by one percent from the rate which the company would have paid had the deposit been accepted for a period for which such deposit had run and the company shall not pay interest at any rate higher than the rate so desired. company must make premature repayment of deposit, if and when a depositor approaches the company, strictly according to the provisions of rule 8(1) of the said rules which provides that barring the exception contained in the proviso to the sub rule, where the company makes repayment of a deposit after the expiry of six months from the date of such deposit but before the expiry of such deposit was accepted by the company, the rate of interest payable by the company on such deposit, shall be reduced by one percent from the rate which the company would have paid had the deposit been accepted for a period for which such deposit had run and the company shall not pay interest at any rate higher than the rate so desired. 15. Maintenance of liquid Assets: 15. Maintenance of liquid Assets: At least 15% of the Amount deposited maturing during the year ending shall be deposited or invest in any of the following: At least 15% of the Amount deposited maturing during the year ending shall be deposited or invest in any of the following: In a current or other deposit account with any scheduled bank, free from charge or lien. In a current or other deposit account with any scheduled bank, free from charge or lien. In a encumbered securities of the Central Government or the state Government In a encumbered securities of the Central Government or the state Government In a encumbered securities mentioned in clauses (a) to (d) and (ee) of section 20 of the Indian Trust Act, 1882; In a encumbered securities mentioned in clauses (a) to (d) and (ee) of section 20 of the Indian Trust Act, 1882; In a encumbered bonds issued by the Housing Development Finance Corporation Limited. In a encumbered bonds issued by the Housing Development Finance Corporation Limited. The amount so deposited shall not be utilized for any purpose other than the repayment of deposit maturing during the year, provided that the sum remaining deposited or invested as the case may be, shall not, at any time, fall ten percent of the amount deposits maturing that year. The amount so deposited shall not be utilized for any purpose other than the repayment of deposit maturing during the year, provided that the sum remaining deposited or invested as the case may be, shall not, at any time, fall ten percent of the amount deposits maturing that year.

20 20 CONTINUE: 16. Refund of Excess Deposit: 16. Refund of Excess Deposit: Ceiling limit as required under rule 3(2) provides that any excess received by the company shall be refund within 30 days or such other extended time not exceeding 30 days as may be allowed by the central Government. Ceiling limit as required under rule 3(2) provides that any excess received by the company shall be refund within 30 days or such other extended time not exceeding 30 days as may be allowed by the central Government. 17.Brokerage payable: 17.Brokerage payable: The Brokerage payable by the company shall not exceed the limit prescribed under Rule 3(1) (d) i.e no company shall pay brokerage exceeding one percent of the deposit for a period upto one year, one and half percent of the deposit for a period of more than one year but upto two years and two percent of deposit for a period exceeding two years collected by and through such broker and such payment shall be on one time basis. The Brokerage payable by the company shall not exceed the limit prescribed under Rule 3(1) (d) i.e no company shall pay brokerage exceeding one percent of the deposit for a period upto one year, one and half percent of the deposit for a period of more than one year but upto two years and two percent of deposit for a period exceeding two years collected by and through such broker and such payment shall be on one time basis. 18. Rate of Interest: 18. Rate of Interest: Rate of interest offered by the company on Deposit does not exceed the maximum rate of interest prescribed by the Reserve Bank of India that the non Banking Financial Companies can pay on their public Deposit. Rate of interest offered by the company on Deposit does not exceed the maximum rate of interest prescribed by the Reserve Bank of India that the non Banking Financial Companies can pay on their public Deposit. Only after complying with the above provision and procedure a company can accept deposit under section 58A of the companies Act, 1956.


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