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Explain the following term/concept. Deposit Repayment Reserve Account. - Secretarial Practice

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Question

Explain the following term/concept.

Deposit Repayment Reserve Account.

Explain
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Solution

  1. A Deposit Repayment Reserve Account is a special bank account that a company accepting deposits must maintain under Section 73(2)(c) of the Companies Act, 2013.
  2. Every company is required to deposit not less than 20% of the amount of its deposits maturing during the following financial year in a scheduled bank in this separate account.
    The amount must be deposited on or before 30th April each year.
  3. The money in the Deposit Repayment Reserve Account shall be used only for the purpose of repaying deposits when they become due and for no other purpose.
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Terms and Conditions for Acceptance of Deposits
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Chapter 5: Deposits - Exercises [Page 91]

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