RA deposit requirement now scaled to client count, held as bank deposit or liquid/overnight MF units
The Regulation 8 deposit every RA must maintain is now a slab based on the maximum number of clients served in the previous financial year (₹1 lakh up to 150 clients, rising to ₹10 lakh for 1,001+ clients), and can be held as a bank deposit or as units of a liquid or overnight mutual fund — not just cash. The deposit is marked as a lien in favour of RAASB and must be reassessed by 30 April each year.
“an RA shall maintain the deposit in the form of units of liquid mutual fund or an overnight mutual fund or as a deposit maintained with a scheduled bank. The deposit requirements shall be based on the maximum number of clients of RA on any day of the previous financial year, as under: Up to 150 clients — 1 lakh; 151 to 300 clients — 2 lakh; 301 to 1,000 clients — 5 lakhs; 1,001 and above clients — 10 lakhs.”
An RA who served a maximum of 220 clients on any day of the last financial year must maintain a ₹2 lakh deposit (the 151-300 client slab), as a bank deposit or units of a liquid/overnight mutual fund, marked as a lien in RAASB's favour. If that RA's peak client count crosses 300 in the current year, the deposit must be revised up to ₹5 lakh by the following 30 April.
Illustrative scenario written by Northspread — not text from the circular itself.