The Warehousing Development and Regulatory Authority (“WDRA”), through a notification dated 22nd January, 2019, has revised the procedure for requirement of Security Deposit for registration of warehouses with the Authority.
Key Highlights:
- The details of the amount and manner of Security Deposit to be furnished by the applicant or the warehouseman have undergone changes. Prior to the amendment, the concept of Dynamic and Fixed Security Deposit did not exist. The amendment dictates that the warehouseman shall maintain a Security Deposit in the form of bank guarantee which will be held by the WDRA during the period of registration. The Security Deposit has two components, i.e. fixed and dynamic Security Deposit.
- Fixed Security Deposit: The fixed Security Deposit is Rs. 1 lakh per warehouse belonging to the warehouseman registered with WDRA (detailed in the column C in the table below for registration of warehouses).
- Dynamic Security Deposit: Dynamic Security Deposit is a percentage of the maximum value of negotiable and non-negotiable warehouse receipts (whether in electronic or physical form) put together outstanding consolidative in all the registered warehouses of the warehouseman on any day during the preceding month, referred as T in the table below. The percentage of the value of negotiable and non-negotiable warehouse receipts (whether in electronic or physical form) is in slabs (detailed in the column A & B in the table below). A is the required Security Deposit in the previous slab whereas B is Security Deposit required in the referred slab for the dynamic Security Deposit.
| Slab | Dynamic Security Deposit | Fixed Security Deposit | |
| A | B | C | |
| T* is less than or equal to Rs.25 crore | 0 | 3% of T | Rs. 1 lakh per warehouse |
| T is above Rs.25 crore and up to 250 crore | Rs. 75 lakh | 1.5% of excess of T over Rs. 25 crore | Rs. 1 lakh per warehouse |
| T is above Rs.250 crore and up to 2,500 crore | Rs. 4.125 crore | 1% of excess of T over Rs. 250 crore | Rs. 1 lakh per warehouse |
| T is above Rs.2,500 crore | Rs. 26.625 crore | 0.5% of excess of T over Rs. 2500 crore | Rs. 1 lakh per warehouse |
Note: Here ‘T’ is referred in the above Table as highest value of total outstanding negotiable warehouse receipts in over the preceding month for all the warehouses registered by the warehouseman.
2. Prior to the amendment, the entire Security Deposit favouring WDRA had to be maintained for a period of 6 months beyond the expiry of Registration. The amendment dictates that the fixed Security Deposit shall be maintained for a period of 6 months beyond the registration period whereas the dynamic Security Deposit shall be updated at the end of each month. The validity of dynamic Security Deposit can be kept for a period of at least 6 months so as to take care of any changes in the requirement of Security Deposit.
3. The amendment has revised the ‘First Schedule’ where the Format for Bank Guarantee for Security Deposit Payment to be submitted by Warehouseman has been prescribed. Please find the revised ‘First Schedule’ attached for your reference.
Source: Warehousing Development and Regulatory Authority
