Security Deposit From Employees - 1st April 2014

Dear friends,
Till now, there was no ceiling on employees security deposit taken by companies. However, as per Rule 2(1)(c )(x) of Companies (Acceptance of Deposits) Rules 2014, which has come into force from today, i.e. 1st April 2014, a ceiling has been fixed. Now a company can only take an amount from employee not exceeding his annual salary under contract of employment with the company in the nature of non-interest bearing security deposit. This is just for your information.
Thanks

Dear Agrawal ji,

Thank you very much for sharing the information.

I read the notification and confused myself.

What I understand that this rules 2014 are applicable to Companies registered under Indian Companies Act other than - (i) a banking company; (ii) a non-banking financial company as defined in the Reserve Bank of India Act, 1934 (2 of 1934) registered with the Reserve Bank of India; (iii) a housing finance company registered with the National Housing Bank established under the National Housing Bank Act,1987 (53 of 1987); and (iv) a company specified by the Central Government under the proviso to sub-section (1) of section 73 of the Act.

The Companies Act defines in section 2(13) “deposit” as 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;

Now the rule 2(1)(c)(x) says: “deposit” includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include- any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of non-interest bearing security deposit;



I have a question here as to What is the non-interest bearing security deposit?

This means I can take deposit from my employees.

I will be highly obliged if you can through some light on this.

Dear Mr. Keshav
Non interest bearing security deposit means the Security Deposit paid to the company by the persons will not attract any interest and the company will not pay any interest for the Deposited amount as Security.
On completion of the contractual agreement between both the parties, the amount deposited as security will have to be given back to the depositor by the company without adding any interest for the said amount.