Chapter V - Acceptance of Deposits by Companies
Section 76
Section 76: acceptance of deposits from the public
A public company that meets the prescribed net worth or turnover may accept deposits from persons other than its members, subject to section 73(2), rules framed in consultation with the RBI, an annual credit rating and charge creation for secured deposits.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Notwithstanding anything contained in section 73, a public company, having such net worth or turnover as may be prescribed, may accept deposits from persons other than its members subject to compliance with the requirements provided in sub-section (2) of section 73 and subject to such rules as the Central Government may, in consultation with the Reserve Bank of India, prescribe: Provided that such a company shall be required to obtain the rating (including its networth, liquidity and ability to pay its deposits on due date) from a recognised credit rating agency for informing the public the rating given to the company at the time of invitation of deposits from the public which ensures adequate safety and the rating shall be obtained for every year during the tenure of deposits: Provided further that every company accepting secured deposits from the public shall within thirty days of such acceptance, create a charge on its assets of an amount not less than the amount of deposits accepted in favour of the deposit holders in accordance with such rules as may be prescribed.
(2) The provisions of this Chapter shall, mutatis mutandis, apply to the acceptance of deposits from public under this section.
Introduction
Section 73 generally restricts deposit acceptance to members. Section 76 opens a separate route for public companies with the prescribed net worth or turnover to accept deposits from the public.
The section came into force on 1 April 2014 (S.O. 902(E)) and has not been amended. Section 76A, inserted in 2015, sets the punishment for contraventions of sections 73 and 76.
Key takeaways
Who may accept
Only a public company having the net worth or turnover prescribed by rules.
Conditions
Compliance with section 73(2), the rules made in consultation with the Reserve Bank of India, and a recognised credit rating obtained every year of the deposit tenure.
Secured deposits
A charge on assets of at least the deposit amount must be created for deposit holders within thirty days of acceptance.
Confirm eligibility
Check that the company is a public company and that it meets the net worth or turnover threshold prescribed in the Companies (Acceptance of Deposits) Rules, 2014, as currently amended. The Act leaves the threshold to the rules; confirm the current figures in the official MCA text.
Apply section 73(2) and the rules
Section 76(1) requires compliance with the requirements in section 73(2) and with the rules prescribed by the Central Government in consultation with the Reserve Bank of India. Sub-section (2) applies the rest of Chapter V, with necessary changes, to public deposits.
Rating and security
Obtain a rating from a recognised credit rating agency covering net worth, liquidity and ability to pay deposits on the due date, inform the public of it when inviting deposits, and renew it every year of the deposit tenure. For secured deposits, create a charge on assets of not less than the deposits accepted, in favour of the deposit holders, within thirty days of acceptance and in accordance with the rules.
Consequences of contravention
Accepting or inviting deposits in contravention of section 76 or its rules, or failing to repay on time, attracts section 76A: a company fine of not less than one crore rupees or twice the deposit amount, whichever is lower, extending to ten crore rupees, and imprisonment up to seven years with a fine of twenty-five lakh to two crore rupees for officers in default.
Practical preparation
Verify public-company status and the prescribed threshold; complete section 73(2) steps; obtain and publish the credit rating; create and register any charge for secured deposits within thirty days; repeat the rating annually during the tenure.
Practical checklist
Do
- Diarise the annual rating renewal for the whole deposit tenure.
- Register the charge for secured deposits under Chapter VI as well as creating it.
Avoid
- Do not invite public deposits on the strength of member-deposit approvals alone.
- Do not rely on remembered thresholds; confirm the current rules.
Illustrative example
Hypothetical: launching a public deposit scheme
A listed public company wants to raise secured deposits from retail investors.
Eligibility
Confirm its net worth or turnover meets the current prescribed limit.
Rating
Obtain a recognised credit rating and disclose it when inviting deposits.
Security
Create a charge for deposit holders within thirty days of acceptance and register it.
Outcome
- The scheme follows the section 76 route, with annual rating renewals diarised for the tenure.
Glossary
- Secured deposit
- A deposit backed by a charge on the company’s assets in favour of deposit holders.
- Credit rating agency
- A recognised agency that rates the company’s capacity to repay deposits.
Frequently asked questions
Can a private company accept deposits from the public under section 76?
No. Section 76 is limited to public companies having the prescribed net worth or turnover.
How often must the rating be obtained?
Every year during the tenure of the deposits.
What is the deadline to create a charge for secured deposits?
Within thirty days of accepting the deposits, for an amount not less than the deposits accepted.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026