Accptance of deposit in terms of gold by PVT ltd Co

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GOVIND BANSAL (Querist)
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31 May 2011 dear sir

if a private limited comapny engaged in the business of trading & manufacturing of jwellery can accept the deposit from its customers & isuue certificate against that.

what are relevant provions which may attract under the companies act , I .T act , Vat Act & other relevant acts.

Can such comany can pay interest or some benefits on such deposits also to customers.

U S Sharma

U S Sharma (Expert)
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31 May 2011 http://www.rediff.com/money/2007/jul/20nbfc.htm

GOVIND BANSAL

GOVIND BANSAL (Querist)
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31 May 2011 i have gone through the whole documents on the link

What is 'deposit' and 'public deposit'? Is it defined anywhere?

The term 'deposit' is defined under Section 45 I(bb) of the RBI Act, 1934. 'Deposit' includes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form but does not include:

amount raised by way of share capital, or contributed as capital by partners of a firm;
amount received from scheduled bank, co-operative bank, a banking company, State Financial Corporation, IDBI or any other institution specified by RBI;
amount received in ordinary course of business by way of security deposit, dealership deposit, earnest money, advance against orders for goods, properties or services;
amount received by a registered money lender other than a body corporate;
amount received by way of subscriptions in respect of a 'Chit'.
Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits ( Reserve Bank) Directions, 1998 defines a ' public deposit' as a 'deposit' as defined under Section 45 I(bb) of the RBI Act, 1934 and further excludes the following: amount received from the Central/State Government or any other source where repayment is guaranteed by Central/State Government or any amount received from local authority or foreign government or any foreign citizen/authority/person;
any amount received from financial institutions;
any amount received from other company as inter-corporate deposit;
amount received by way of subscriptions to shares, stock, bonds or debentures pending allotment or by way of calls in advance if such amount is not repayable to the members under the articles of association of the company;
amount received from shareholders by private company;
amount received from directors or relative of the director of a NBFC;
amount raised by issue of bonds or debentures secured by mortgage of any immovable property or other asset of the company subject to conditions;
the amount brought in by the promoters by way of unsecured loan;
amount received from a mutual fund;
any amount received as hybrid debt or subordinated debt;
any amount received by issuance of Commercial Paper.
Thus, the directions have sought to exclude from the definition of public deposit amount raised from certain set of informed lenders who can make independent decision.

the word has been used "any 'Deposit' includes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form but does not include:" that means deposit in terms of movable assets that is gold is not covered with in the meaning of
deposit as defined The term 'deposit' is defined under Section 45 I(bb) of the RBI Act, 1934

GOVIND BANSAL

GOVIND BANSAL (Querist)
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31 May 2011 the word receipt of money by way of deposit or loan carries quite significance in my opinion
what is your view that would be bonus to add extra knowledge on subject

further this could not be understood by me There are some entities (not companies) which carry on activities like that of NBFCs. Are they allowed to take deposit? Who regulates them?

Any person who is an individual or a firm or unincorporated association of individual cannot accept deposit except by way of loan from relatives, if his/its business wholly or partly includes business that of loan, investment, hire-purchase or leasing company or principal business is that of receiving of deposits under any scheme or arrangement or in any manner or lending in any manner.

which act restrcit such persons from accepting such deposit