Inter Corporate Deposit

Whether Inter Corporate Deposit (ICD) is Deposit under Companies Act?

Section 2 (31) “deposit” includes any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India;

Companies (Acceptance of Deposit) Rules 2014, Rule 2 (1) c (vi) specifically excludes any amount received by a company from any other company.

Section 74. (1) of Companies Act, 2013 Where in respect of any deposit accepted by a company before the commencement of this Act, the amount of such deposit or part thereof or any interest due thereon remains unpaid on such commencement or becomes due at any time thereafter, the company shall—

(a) file, within a period of three months from such commencement or from the date on which such payments, are due, with the Registrar a statement of all the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment, notwithstanding

anything contained in any other law for the time being in force or under the terms and conditions subject to which the deposit was accepted or any scheme framed under any law; and

(b) repay within one year from such commencement or from the date on which such payments are due, whichever is earlier.

Answer: No. It is not deposit as per Companies Act, 2013/ 1956. It is loan. The name doesn’t make it deposit.

Governing Section: 185 – Private Companies will be hit if  not specifically exempted.