Public Deposits - Acceptance of ‑ Scope and provision of Companies (Acceptance of Deposits) Rules, 1975 explained - Companies Law - Letter : No. 3/2/86‑CL‑X,

Letter : No. 3/2/86 ‑ CL ‑ X, dated 14 ‑ 10 ‑ 1988. Subject:-Public Deposits - Acceptance of ‑ Scope and provision of Companies (Acceptance of Deposits) Rules, 1975 explained Rule 3(1)(d) : WHETHER THE MANAGEMENT CHARGES COULD BE PAID IN ADDITION TO THE BROKERAGE AND WOULD NOT BE SUBJECT TO THE LIMITS The question as to whether the management charges/manager s fee could be paid in addition to brokerage for inviting deposits from the public by companies with reference to rule 3(1)(d), has been examined by the Department and it is felt that the charges paid to agents, whether it is called service charges or manager s fees or any other such names would amount to payment of brokerage . If such a brokerage is in excess of the rates specified in the Rules, it would be in contravention of rule 3(1)(d). 2. However, the companies may reimburse the actual expenses incurred by the agents or managers such as advertising expenses, printing charges, etc., but should not pay additional remuneration to the agents as it would be against the interest of the depositors.