OMTEX CLASSES: EXPLAIN THE PROCEDURE INVOLVED IN THE RENEWAL OF DEPOSITS?

EXPLAIN THE PROCEDURE INVOLVED IN THE RENEWAL OF DEPOSITS?

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           Introduction: -A company can renew the deposits. Normally, a company may ask for renewal of deposit. In such case, the company sends a deposit renewal application form.

         The following is the procedure regarding renewal of deposits:
1.       Updating the Records: -The secretary needs to up-date the records relating to deposits, which are likely to mature in the near future.

2.       Board Meting: -The secretary may arrange for Board meeting. He has to place before the Board the list of depositors whose deposits are likely to mature within the next few days. The board may decide regarding renewal or repayment of such deposits.

3.       Board Resolution: -If the company intends to renew deposits instead of refunding it, then it should pass resolution in the board meeting in this respect

4.       Request to Depositors- If the Board decides in favour of renewing the deposits, and then the secretary needs to send a request to the depositors to renew the deposit. He may send a deposit renewal application from.

5.       Accepting the Deposit Renewal Application Forms: -The secretary will have to make arrangements for accepting the deposits renewal applications forms, either directly or through the company’s bankers.

6.       Verification of the Renewal Forms: -The secretary has to verify the details in the deposit renewal application forms.

7.       Issue of Deposit Renewal Receipt: -The secretary issues the deposit renewal receipt. He has to collect the old deposit renewal receipt. He has to collect the old deposit receipt from the depositors.

8.       Entries in the Register of Depositors: -The secretary should make necessary entries in the register of depositors such as:
·         The amount of deposit that is renewed.
·         The period for which the deposit is renewed.
·         The rate of interest on such renewal.
·         Other relevant details.