Interpretition of the term 'borrowing'

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Can any one tell me, whether the term 'borrowing' u/s 293(1)(d) of the Companies Act 1956, includes public deposit  or not.

If the answer is yes, then why?

Replies (1)

yes, the term borrowing includes public deposit,    The section states that 'Borrows Moneys'  so accepting of deposits from the public is also borrowing money from public, so the term therefore includes acceptance of deposits from public.

Also please read sub-section 4 of the section 293, it states as follows:

(4) The acceptance by a banking company, in the ordinary course of itsbusiness, of deposits of money from the public, repayable on demand orotherwise, and withdrawable by cheque, draft, order or otherwise, shall not bedeemed to be a borrowing of moneys by the banking company within themeaning of clause (d) of sub-section (1).

So a co other than a banking co accepting deposits from public will be considered as borrowing adn the provison of teh section will apply accordingly.


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