Public deposits

details about public deposits

1. PUBLIC DEPOSITS

2. What is public deposits? Public deposits refer to the unsecured deposits invited by companies from the public mainly to finance working capital needs. A company wishing to invite public deposits makes an advertisement in the newspaper.

3. Merits of public deposits Simplicity Economy No charge on assets Flexibility Trading on equity No dilution of control Wide contacts

4. Demerits of public deposits Uncertainty Limited funds Temporary finance Speculation Hindrance to growth of capital market Limited appeal Unsuitable for new concerns

5. Regulation of public deposits Since 1967, reserve bank of India (RBI) has started to regulate and control public deposits accepted by non-banking companies. The regulations and provisions were introduced in January 1967.