Who Is a Depositor? The Secretary's Correspondence with Depositors

A Depositor Is a Creditor, Not an Owner

Chapter 5 defined a 'deposit', under Section 2(31) of the Companies Act, 2013, as any receipt of money by a company by way of deposit, loan, or in any other form (subject to the exclusions that chapter listed in detail). The person, or institution, who places such a deposit with a company — whether an existing member of the company under Section 73(2), or a member of the general public accepted by an eligible company under Section 76 — is a Depositor. A depositor lends the company money for a fixed period at a fixed rate of interest; in exchange, the depositor becomes one of the company's creditors, entitled to receive interest as agreed and repayment of the principal on the date stated in the deposit receipt, but — unlike a member holding shares — a depositor holds no ownership stake in the company, has no voting right at its general meetings, and has no claim to a share in profits beyond the fixed interest promised.

This distinction — creditor, not owner — is exactly why a depositor's correspondence with the company looks different from a member's or even a debenture-holder's. A depositor does not receive a notice of the AGM and does not vote on a resolution; a depositor corresponds with the company only about the deposit itself — its acceptance, its interest, its renewal, and its repayment.

Occasions Requiring Correspondence with Depositors

A Company Secretary corresponds with a depositor on several distinct occasions across a deposit's life, each of which this chapter studies through its own specimen letter:

1. Acceptance of the deposit and issue of the deposit receipt — acknowledging that the deposit has been received and issuing the documentary evidence of the debt.
2. Payment of interest on the deposit — forwarding the interest due, as and when it falls due under the terms of the deposit receipt.
3. Renewal of the deposit — inviting the depositor, as maturity approaches, to renew the deposit for a further period rather than withdraw it, and confirming the renewal once accepted.
4. Repayment of the deposit on maturity — repaying the principal (with any interest still due) on the exact date the deposit receipt promised, and closing the deposit.
5. Regretting non-acceptance of a deposit application, with refund — where an application to place a deposit cannot lawfully be accepted (for instance, because accepting it would take the company's total deposits beyond the statutory ceiling Chapter 5 studied), returning the money promptly and courteously rather than holding on to it.

<!-- FIGURE-NEEDED: Flow diagram: Deposit application received -> Deposit accepted & Deposit Receipt issued -> Interest paid periodically -> Maturity approaches -> EITHER Renewed for a further period OR Repaid and closed; a side branch from 'Deposit application received' showing 'Cannot be accepted -> Regret letter + full refund' -->

Essentials of a Good Letter to a Depositor

Whatever its specific occasion, a letter from the Secretary to a depositor should always contain:

1. The company's own letterhead — name, registered office address, and CIN.
2. The depositor's name and address, and the Deposit Receipt number, quoted clearly once a deposit already exists.
3. A short, specific subject line stating exactly what the letter concerns.
4. A courteous, formal salutation ('Dear Sir/Madam,') and complimentary close ('Yours faithfully,'). …