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CA Intermediate · Corporate and Other Laws · Acceptance of Deposits by Companies

Kaveri Engineering Ltd, an eligible public company, holds a deposit-repayment reserve requirement. It has deposits maturing during the financial year 2026-27 and the next year. Under the Companies (Acceptance of Deposits) Rules, 2014, by what date each year must it deposit, in a separate bank account, at least a specified percentage of the amount of deposits maturing in the following financial year?

The company must deposit at least 20% of the deposits maturing during the following financial year in a separate deposit repayment reserve account with a scheduled bank on or before 30th April each year. This amount can be used only to repay deposits.

  1. A15% of such amount, by 30th April of the year
  2. B20% of such amount, by 30th April of the yearCorrect
  3. C20% of such amount, by 31st March of the year
  4. D25% of such amount, by 30th June of the year

Explanation

The deposit repayment reserve account must hold at least 20% of the deposits maturing during the following financial year (and the one ending 31 March of the next), to be deposited on or before 30th April each year. The amount may not be used for any purpose other than repayment of deposits. 15% is the old, incorrect rate, and 31 March and 30 June are not the prescribed dates.

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