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Question
Explain any two advantages of Public deposits.
Answer in Brief
Solution
- Simple Procedure: There are less legal requirements for issuing and withdrawing monies from public deposits. Unlike shares and debentures, companies do not need to seek approval from the capital controller or be listed on a stock exchange.
- Economical: Obtaining public deposits is quite a minimal cost. Companies do not have to spend money on prospectuses or underwriting commissions. Public deposits offer lower interest rates compared to other banking organisations.
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Short-term Sources of Funds - Public Deposits
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