Regulatory Updates: Ministry of Corporate Affairs - Notification of the Companies (Acceptance of Deposits) Amendment Rules, 2017

Ministry of Corporate Affairs vide its notification dated 11 May 2017 has amended the Companies (Acceptance of Deposits) Rules 2014 to include “Infrastructure Investment Trusts” in the exemption category and to defer “deposit insurance” for another one year (till 31 March 2018) in the absence of suitable deposit insurance product in the market. Section 73(2) of the Companies Act 2013 read with Rule 5 of Companies (Acceptance of Deposits) Rules, 2014 mandates that every company inviting deposits shall enter into a contract for providing deposit insurance at least 30 days before the issue of circular or advertisement or renewal as the case may be. However, in view of non-availability of such deposit insurance products, companies are now allowed to raise deposits without any deposit insurance till 31st March, 2018, as per proviso to Rule 5(1) of the Companies (Acceptance of Deposits) (Amendment) Rules, 2017. Source

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