Importance of “Deposits” under the Unregulated Deposit Scheme Ordinance

 

Deposit means – an amount of money received by way of an advance or loan or in any other form, by any deposit taker with a promise to return whether after a specified period or otherwise, either in cash or in kind or in the form of a specified service, with or without any benefit in the form of interest, bonus, profit or in any other form.

 

What is Not Considered as Deposit

 

1. Amounts received as loan from a scheduled bank or a co-operative bank or any other banking company as defined in section 5 of the Banking Regulation Act, 1949

 

2. Amounts received as loan or financial assistance from the Public Financial Institutions notified by the Central Government in consultation with the Reserve Bank of India or any non-banking financial company as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 and is registered with the Reserve Bank of India or any Regional Financial Institutions or 25 insurance companies

 

3. Amounts received from the appropriate Government , or any amount received from any other source whose repayment is guaranteed by the appropriate Government, or any amount received from a statutory authority constituted under an Act of Parliament or a State Legislature

 

4. Amounts received from foreign Governments, foreign or international banks, multilateral financial institutions, foreign Government owned development financial institutions, foreign export credit collaborators, foreign bodies corporate, foreign citizens, foreign authorities or persons resident outside India subject to the provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder

 

5. Contributions towards the capital by partners of any partnership firm or a limited liability partnership

 

6. Amounts received by an individual by way of loan from his relatives or amounts received by any firm by way of loan from the relatives of any of its 40 partners. *Note* the expression “relative” shall have the same meaning  as assigned to it in the Companies Act, 2013;

 

7. Amounts received as credit by a buyer from a seller on the sale of any property* (whether movable or immovable)

 

8. Amounts received by an asset re-construction company which is registered with the Reserve Bank of India under section 3 of the Securitisation 45 and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

 

9. Any deposit made under section 34 or an amount accepted by a political party under section 29B of the Representation of the People Act, 1951;

 

10. Any periodic payment made by the members of the self-help groups operating within such ceilings as may be prescribed by the State Government or Union territory Government

 

11. Any other amount collected for such purpose and within such ceilings as may be prescribed by the State Government

 

12. An amount received in the course of, or for the purpose of, business and bearing a genuine connection to such business including—

 

(i) payment, advance or part payment for the supply or hire of goods or provision of services and is repayable in the event the goods or services are not in fact sold, hired or otherwise provided;

 

(ii) advance received in connection with consideration of an immovable property* under an agreement or arrangement subject to the condition that such advance is adjusted against such immovable property as specified in terms of the agreement or arrangement;

 

(iii) security or dealership deposited for the performance of the contract for supply of goods or provision of services; or

 

(iv) an  advance under the long-term projects for supply of capital goodexcept those specified in item (ii):

Provided that if the amounts received under items (i) to (iv) become refundable, such amounts shall be deemed to be deposits on the expiry of fifteen days from the date on which they become due for refund.