JAIN SHAH & CO.

CHARTERED ACCOUNTANTS

VERY IMPORTANT

BAN ON ACCEPTANCE OF DEPOSITES

1. From 21.02.2019 onwords following persons can not accept deposit except from the persons
listed at para 2 here under:-
I. an individual
II. a Hindu Undivided Family
III. a company
IV. a trust
V. a partnership firm
VI. a limited liability partnership
VII. an association of persons
VIII. a co-operative society
IX. Every artificial juridical persons

2. Deposits from following persons are not covered in this Act .

I. Members of HUF
II. Father
III. Mother
IV. Son
V. Son’s Wife
VI. Daughter
VII. Daughter’s Husband
VIII. Brother
IX. Sister

3. Following transaction are not covered under deposits:

a) Loans from a Scheduled Bank including co-operative banks
b) Loans from a Financial Institutions & Non-Banking Financial Company
c) Loans from appropriate Government or any other source whose
repayment is guaranteed by the appropriate government.
d) Loans from Foreign Government, Foreign International Banks & Foreign
Citizens including Foreign Government owned development financial
institutions or person resident outside India.
e) Loans contributions towards the capital by partners of any partnership
firm & LLP.
f) Loans by an individual by way of loan from his relatives & in case of firm
loan from the relatives of any of its partners.
g) Loans from as credit by a buyer from a seller on the sale of any
property.

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D-43, 2 Floor, Dev Nagar Tonk Road, Jaipur –302018 Ph.: 0141-2719244, 9314506640, 9314506363
 JAIN SHAH & CO.
CHARTERED ACCOUNTANTS

h) Loans from an assets re-construction company which is registered with

RBI including Reconstruction of Financial Assets & Enforcement of
Security Interest.
i) Loans accepted by a political party
j) Loans by the members of the self-help groups
k) Any other amount as may be prescribed by State Government.
l) 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.
II. advance received in connection with consideration of an
immovable property under an agreement
III. security or dealership deposited for the performance of the
contract for supply of goods or provision of services.
IV. an advance under the long-term projects for supply of capital
goods except 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 15 days from the date on which they become due form refund.

Provided further that where the said amounts become refundable, due
to the deposit taker not obtaining necessary permission or approval
under the law for the tome being in force, wherever required, to deal in
the goods or properties or services for which money is taken, such
amounts shall be deemed to be deposits.

4. Offences and Punishments:-

I. Any deposit taker who SOLICITS DEPOSITS in contravention shall be punishable
with imprisonment for a term which shall not be less than 1 year but which may
extend to 5 years & with fine which shall not be less than 2 lakh rupees but
which may extend to 10 lakh rupees.
II. Any deposit taker who ACCEPTS DEPOSITS in contravention shall be punishable
with imprisonment for a term which shall not be less than 2 years but which
extend to 7 years and with fine which shall not be less than 3 lakh rupees but
extend to 10 lakh rupees.
III. Any deposit taker who accepts deposits in contravention and fraudulently
defaults in repayment of such deposits or in rendering any specified service,
shall be punishable with imprisonment for a term which shall not be less than 3
years which extend to 10 years and with fine which shall not be less than 5 lakh
rupees but which extend to twice the amount of aggregate funds collected from
the subscribers, members or participants in the Unregulated Deposit Scheme.

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D-43, 2 Floor, Dev Nagar Tonk Road, Jaipur –302018 Ph.: 0141-2719244, 9314506640, 9314506363