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Explain the following term/concept.Charge on tangible assets - Secretarial Practice

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Question

Explain the following term/concept.
Charge on tangible assets

Short/Brief Note
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Solution

(1) Every company accepting deposits from the public shall create a charge on its tangible assets of an amount not less than the amount of deposits accepted in favour of the deposit holders in accordance with such rules as may be prescribed.
(2) The charge should be created within 30 days from accepting the deposits. The minimum amount of security should be equal to the amount not covered by Deposit Insurance. The security is created in favour of the Deposit Trustee.

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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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