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Question
What are public deposits?
Solution
- 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 newspapers. Any member of the public can fill up the prescribed form and deposit the money with the company.
- The company in return issues a deposit receipt. This receipt is an acknowledgement of debt by the company. The terms and conditions of the deposit are printed on the back of the receipt. The rate of interest on public deposits depends on the period of deposit and reputation of the company.
RELATED QUESTIONS
Write a word or terrn or phrase which can substitute each of
the following statements:
The authority which has power to accept deposits.
Select the proper option from the option given below and rewrite the sentences:
Company can accept deposits from public, maximum for _____ months.
Write notes on (Any Three)
Repayment of Deposits.
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OR
What are the provision and rules of companies Act1956 with respect to the Invitation of Public deposits?
With reference to business finance, explain the following: Public Deposits
State the merits and demerits of public deposits and retained earnings as methods of business finance.
A public deposit is a deposit made by public in the nationalised banks.
Discuss the importance of public deposits as sources of medium and short-term finance.
Describe the disadvantages of public deposits.
