Rules and Regulations of India

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8. General provisions regarding repayment of deposits

32[(1)] Where a company makes repayment of a deposit after the expiry of a period of six months from the date of such deposit but before the expiry of’ the period for which such deposit was  accepted by the Company, the rate of interest payable by the company on such deposit, shall be reduced by 33[one per cent] from 4[the rate which the company would have paid the deposit been accepted for the period for which such deposit had run] and the company shall not pay interest at any rate higher than the rate as so reduced:


34[Provided that nothing contained in this rule shall apply to the repayment of any deposit before the expiry of the period for which such deposit was accepted by the company, if such repayment is made solely for the purpose of-


(a) complying with the provisions of the Non-Banking Non-financial Companies (Reserve Bank) Directions, 1966; or


(b) complying with the provisions of rule 3; or


(c) converting, with the consent of the depositors, into secured debentures in accordance with the guidelines, issued by the Government of India from time to time, regarding the issue of “rights” debentures; or


(d) providing war risk or other related benefits to the personnel of the naval, military or air forces or to their families, on an application made by the associations or societies formed by such personnel, during the period of emergency declared under Article 352 of the Constitution.


35[Provided further that where a company permits a depositor to renew his deposit, before the expiry of the period for which such deposit was accepted by the company, for availing of the higher rate of interest, the company shall pay interest to such depositor as higher rate if-


(i) such deposit is renewed in accordance with the other provisions of these rules and for a period longer than the unexpired period of the deposit, and


(ii) the rate of interest as stipulated at the time of the acceptance or renewal of deposit is reduced by one per cent for the expired period of the deposit and is paid or adjusted or recovered accordingly.]


Explanation- For the purpose of this rule, where the period for which the deposit had run contains any part of a year, then, if such part is less than six months, it shall be excluded and if such part is six months or more, it shall be reckoned as one year.]


36[(2) Where depositors so desire, deposits may be accepted in joint names not exceeding three, with or without any of the clauses, namely, “Either or Survivor”, “Number one or Survivor”, “Anyone or Survivor”. ]

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