The Warehousing Development and Regulatory Authority (WDRA) has scrapped the requirement of a fixed security deposit for registration of warehouses, while introducing an advance dynamic security deposit system for warehouses that undertake business involving electronic Negotiable Warehouse Receipts (eNWRs).
The changes were notified by the WDRA through a notification dated August 20, 2026, issued on September 2, 2026, under the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017. The notification supersedes the Authority’s earlier notification of June 14, 2024, along with subsequent amendments, except for actions already undertaken under the earlier provisions.
No fixed deposit for warehouse registration
Under the revised framework, an applicant warehouse or Warehouse Service Provider seeking registration with WDRA will no longer be required to furnish a fixed security deposit for obtaining a registration certificate. However, a registered warehouseman intending to issue eNWRs must furnish an Advance Dynamic Security Deposit (Advance DSD) before commencing such business. The advance deposit will subsequently be adjusted against the dynamic security deposit requirement for the following month.
The Authority will issue a registration certificate once the warehouse meets all requirements under the Warehousing (Development and Regulation) Act, 2007 and the relevant rules and regulations, subject to fulfilment of insurance requirements and approval of the prescribed inspection report.
Deposit linked to value of warehouse receipts
The new system links the security deposit requirement to the value of outstanding negotiable warehouse receipts rather than imposing a uniform fixed amount. For warehouses issuing eNWRs, the Advance DSD will be at least Rs 1 lakh per warehouse, or an amount commensurate with the value of eNWRs proposed to be generated during the month, whichever is applicable under the notification.
A special provision has been made for Farmer Producer Organisations (FPOs), Primary Agricultural Cooperative Credit Societies (PACS) and Self Help Groups (SHGs). For such entities intending to issue eNWRs, the Advance DSD has been fixed at Rs 50,000 per warehouse. The notification specifies that the total security deposit for these entities towards Advance DSD for eNWR issuance will be Rs 50,000 per warehouse.
Four slabs for dynamic security deposit
The dynamic security deposit will be calculated based on T, defined as the maximum value of total outstanding negotiable warehouse receipts across all registered warehouses of a warehouseman on any day during the preceding month.
The table provides for cumulative calculation, with the deposit applicable to the previous slab combined with the amount required under the relevant slab.
The dynamic deposit will become applicable only after the warehouseman begins issuing eNWRs. Thereafter, it will be determined every month based on the maximum value of eNWRs outstanding during the preceding month across all registered warehouses of the warehouseman.
Warehouses without eNWR business exempt
A registered warehouse that does not intend to undertake business involving issuance of eNWRs will not be required to furnish any security deposit to WDRA. This marks a significant differentiation between ordinary warehouse registration and warehouses participating in the negotiable electronic warehouse receipt ecosystem.
Six-month maintenance requirement
The notification also specifies the period for which the security deposits must be maintained. The Advance DSD is required to be maintained throughout the period during which eNWRs are issued and for six months thereafter. The Dynamic Security Deposit will be updated at the end of every month and submitted to the Authority. Its validity may be maintained for a minimum period of six months to account for changes in the security deposit requirement.
WDRA may also adjust security deposits already furnished by a warehouseman against the amount subsequently required, including adjustment of Advance DSD against the dynamic deposit requirement.
Multiple instruments permitted
The revised framework allows security deposits to be provided through bank fixed deposits, bank guarantees or e-bank guarantees, surety insurance policies or contracts, or any other instrument approved by WDRA.
The Authority may also permit eligible entities established under an Act of Parliament or a State Legislature to provide an indemnity bond instead of a security deposit. Such an entity must submit a board resolution authorising the furnishing of the indemnity bond along with its registration application.
For a PACS, WDRA may permit an indemnity bond issued by the State Government for the required security deposit.
Depositor charges cannot be increased
An important safeguard in the notification is that changes in the security deposit requirement cannot be used by warehousemen as a reason to increase charges payable by depositors during the validity period of negotiable warehouse receipts already issued to them. This provision remains applicable even if the security deposit is subsequently revised or adjusted.
When will deposits be refunded?
WDRA will release or refund the security deposit in specified circumstances. These include rejection of a warehouse’s renewal application where the Authority is satisfied that the warehouseman has discharged all obligations, surrender of the registration certificate accepted by the Authority, or cancellation of registration where the warehouseman has fulfilled the applicable obligations.
The notification also provides for continued retention of the security deposit for the required period after cancellation, rejection or surrender, where applicable, to ensure that outstanding claims are dealt with.
New rules apply to fresh registration applications
The revised provisions will apply only to applications for registration of warehouses made on or after the date on which the notification comes into force. Warehouses registered before the commencement of the new provisions, as well as pending registration applications where the security deposit had already been furnished to WDRA, will continue to be governed by the earlier security deposit provisions. The notification makes clear that the new rules will not automatically alter such existing requirements.