The promoters of J Limited contributed an unsecured loan to fulfil the margin-money stipulation of State Industries Development Corporation Ltd.…

Provisions: Under Rule 2(1)(c)(ix) of the Companies (Acceptance of Deposits) Rules, 2014, an amount brought in by promoters by way of unsecured loan, pursuant to a stipulation by a lending financial institution or bank, is excluded from the definition of "deposit". Provided: (a) the loan is brought in because of such stipulation on the promoters; (b) it is provided by the promoters themselves, their relatives, or both; and (c) the exemption is available only until the institutional loan is repaid. Analysis: Here, the unsecured loan from J Limited's promoters was contributed pursuant to SIDCL's margin-money stipulation and provided by the promoters themselves. It therefore does not constitute a "deposit" while the SIDCL loan remains outstanding. Conclusion: However, once the entire SIDCL loan is repaid, the exemption ceases, and the continuing promoters' loan will thereafter be treated as a deposit, requiring compliance with the Companies (Acceptance of Deposits) Rules, 2014 unless repaid or otherwise re-classified.