Secretarial Practice · Ch 5 — Deposits
Distinction Between Deposits from Members and Deposits from the Public
7
Distinction Between Deposits from Members and Deposits from the Public
Bringing together, in one place, everything this chapter has covered separately about Section 73(2) member deposits and Section 76 public deposits makes it far easier to answer a distinguish-type question accurately in an MSBSHSE Secretarial Practice examination, since the two are frequently confused, given that both are, at bottom, deposits accepted by a company under Chapter V of the Companies Act, 2013.
| Basis | Deposits from Members (Section 73) | Deposits from the Public (Section 76) |
|---|---|---|
| Source of money | The company's own existing members only | The general public at large, not restricted to members |
| Company eligible to accept | Any company (other than a company exempted under Section 73(1), such as a banking company or NBFC) | Only an 'eligible company' — a public company meeting the prescribed net worth or turnover threshold |
| Approval required | Ordinary resolution in general meeting | Special resolution in general meeting |
| Mode of invitation | Circular to members, in Form DPT-1 | Circular or public advertisement, in Form DPT-1, published in an English and a vernacular newspaper |
| Credit rating | Not compulsorily required (unless the company also happens to be an eligible company) | Compulsory, obtained afresh every year during the tenure of the deposits |
| Trustee for depositors | Required where deposits are secured / as prescribed | Compulsory, with a deposit trust deed (Form DPT-2) executed at least seven days before the invitation |
| Deposit Repayment Reserve | Required — not less than 20% of the following year's maturing deposits | Required, on the identical basis |
| Filing with Registrar | Copy of circular filed 30 days before its issue | Copy of the special resolution filed before the invitation, in addition to the circular/advertisement |