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INTRODUCTION
 The term
'public deposit
' implies anymoney received by a company through thedeposits or loans collected from the public. The public includes the general public,employees and shareholders of the companybut excludes the money received in the formof shares and debentures. 
 
ADVANTAGES
 
It is an easier method of mobilising funds,especially during periods of credit squeeze.
 The administrative cost of deposits for thecompany is lower than that involved in the issue of shares and debentures.The procedure of invitingpublic deposits is also simpler and involve lesserformalities.
The rate of interest payable by the companyon public deposits is lower than the interest on loansfrom banks and other financial institutions. Such aninterest is a tax deductible expense.
It helps the company to borrow funds from alarger segment of public and thus reduces thedependence of the company upon financialinstitutions.
 
It also enables the company to create contactwith a large number of investors.
It ensures the availability of funds for a longerduration and provides flexibility to the financialstructure of the company. There is no risk of over-capitalisation and the deposits can berepaid when they are not required.
 There is no dilution of shareholders' control asthe depositors have no voting rights and cannotinterfere with the internal management of thecompany
.
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