{"id":4379,"date":"2021-08-07T23:12:17","date_gmt":"2021-08-07T17:42:17","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=4379"},"modified":"2025-10-07T18:57:28","modified_gmt":"2025-10-07T13:27:28","slug":"public-deposits-meaning","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/","title":{"rendered":"Public Deposits Meaning | Advantages and Disadvantages"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e9c665e9d9f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e9c665e9d9f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/#Public_Deposits_Meaning\" >Public Deposits Meaning<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/#Introduction_of_Public_Deposits\" >Introduction of Public Deposits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/#Meaning_of_Public_Deposit\" >Meaning of Public Deposit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/#Advantages_of_Public_Deposit\" >Advantages of Public Deposit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/#Disadvantages_of_Public_Deposit\" >Disadvantages of Public Deposit<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Public_Deposits_Meaning\"><\/span>Public Deposits Meaning<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction_of_Public_Deposits\"><\/span>Introduction of Public Deposits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Public_Deposit\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Meaning of Public Deposit<\/mark><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Public deposit is an important source of financing the short-term requirements of the company. Companies receive fixed deposits from the public for a period ranging from 6 months to 36 months. Such deposits are called as Public Deposits.<\/p>\n\n\n\n<p>Under this method, the general public is invited to deposit their savings with the company for varied periods. Interest is paid by companies on such deposits. The company issues a\u2018 Deposit Receipt\u2019 to the depositor. The terms of deposit are mentioned in the \u2018Deposit Receipt\u2019. A deposit Receipt is an acknowledgment of debt\/loan by the company. Deposits are either secured or unsecured loans offered to the company.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Public-Deposit-meaning--1024x576.png\" alt=\"Public Deposits meaning\n\" class=\"wp-image-5122 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Public-Deposit-meaning--1024x576.png 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Public-Deposit-meaning--300x169.png 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Public-Deposit-meaning--768x432.png 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Public-Deposit-meaning--1536x864.png 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Public-Deposit-meaning-.png 1920w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/public-deposits-meaning\/\" target=\"_blank\" rel=\"noreferrer noopener\">Public Deposit <\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/gdr-meaning\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/gdr-meaning\/\" target=\"_blank\" rel=\"noreferrer noopener\">Global Depository Receipt (GDR)<\/a><\/li>\n<\/ul>\n\n\n\n<p><strong>What is a deposit?<\/strong><\/p>\n\n\n\n<p>c) As per section 2 (31) of <a href=\"https:\/\/www.rbi.org.in\/Scripts\/NotificationUser.aspx?Id=10563&amp;Mode=0\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.rbi.org.in\/Scripts\/NotificationUser.aspx?Id=10563&amp;Mode=0\" rel=\"noreferrer noopener\"><span style=\"color:#00a313\" class=\"has-inline-color\">Companies Act, 2013<\/span><\/a>, \u2018deposit\u2019 includes any receipt of money by way of deposit or loan or in any other form by a company but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India.<\/p>\n\n\n\n<p>d) The above expression has been further elaborated b Rule 2 (1)(c) of Companies (Acceptance of Deposits) Rules 2014. This Rule provides that \u2018deposit\u2019 means any receipt of money, in the form of a deposit or loan by a company.<\/p>\n\n\n\n<p>e) However, \u2018deposit\u2019 does not include the following :<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Any amount received from the Central Government or a State Government.<\/li>\n\n\n\n<li>Any amount received as a loan from any banking company.<\/li>\n\n\n\n<li>Any amount received from a foreign government or international banks.<\/li>\n\n\n\n<li>Any amount received by a company from any other company.<\/li>\n\n\n\n<li>Any amount raised by issuing commercial paper.<\/li>\n\n\n\n<li>Any amount raised by issue of bonds.<\/li>\n\n\n\n<li>Any amount received in trust.<\/li>\n\n\n\n<li>An amount received by way of subscription to shares or debentures.<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_Public_Deposit\"><\/span><strong>Advantages of Public Deposit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(i) The procedure of obtaining deposits is simple and does not contain restrictive conditions as are generally there in a loan agreement.<\/p>\n\n\n\n<p>(ii) Cost of public deposits is generally lower than the cost of borrowings from banks and financial institutions.<\/p>\n\n\n\n<p>(iii) Public deposits do not usually create any charge on the assets of the company. The assets can be used as security for raising loans from other sources.<\/p>\n\n\n\n<p>(iv) As the depositors do not have voting rights, the control of the company is not diluted.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_Public_Deposit\"><\/span><strong>Disadvantages of Public Deposit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(i) New companies generally find it difficult to raise funds through public deposits.<\/p>\n\n\n\n<p>(ii) It is an unreliable source of finance as the public may not respond when the company needs money.<\/p>\n\n\n\n<p>(iii) Collection of public deposits may prove difficult, particularly when the size of deposits required is large.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":5122,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[2060],"class_list":["post-4379","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-misc","tag-public-deposits-meaning"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/4379","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=4379"}],"version-history":[{"count":6,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/4379\/revisions"}],"predecessor-version":[{"id":39247,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/4379\/revisions\/39247"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/5122"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=4379"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=4379"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=4379"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}