Auditor certificate must for deposit-taking firms to ensure investor safety

While this move by the Ministry of Corporate Affairs is a positive one, retail investors should run a few more checks of their own before investing in a company's fixed deposit

The Ministry of Corporate Affairs has made it compulsory for companies raising public deposits to attach a statutory auditor’s certificate in the circular or advertisement meant to raise deposits. The new rule will come into effect from August 15.

Before issuing the certificate, the auditor will have to check several things: Whether the company has accepted deposits in the past. If it has, did it to repay the principal and interest on time? If there was a default, did the company make good the default? And finally, it will check whether five years have elapsed since the date of making good