||Nidhi Company Act
||Section & Authority
||406 of the Companies Act, 2013 effective from 01.04.2014. All Nidhi companies are controlled by Ministry of corporate affairs (MCA)
||Always incorporated Public Company
||Minimum Paid Up Equity Capital
||No Nidhi shall have any object other than the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit
||Minimum Shares to be subscribed
||10 Equity Shares of Rs 10/- each for other
||1. Earned net profits after tax continuously during the preceding three financial years.
Subject to up to three branches within the district.
2. If need to open more than three branches within the district or any branch outside the district, Required prior permission of Regional Director
||Restriction on opening Branches
||1. Branches outside State where its registered office is situated.
2. If financial statement and annual return (up to date) are not filed with the Registrar.
||Acceptance of Deposits
||Deposits are not exceeding twenty times of its Net Owned Funds (NOF) as per its last audited financial statements.
||Period of Deposits
||1. Fixed Deposit – 6 to 60 Months
2. Recurring Deposit – 12 to 60 Months
3. Recurring deposits relating to mortgage loans – Maximum Period correspond to repayment period of Loans
4. Maximum Balance in Saving deposit account shall not exceed Rs 1 Lakh at any point of time
||Rate of interest to be given
||1. Saving account – Not exceed 2% above rate payable on Saving account by nationalised Banks viz. 9%
2. Fixed or Recurring – Maximum rate of interest which NBFC can pay on their public deposits viz. 12.5%
||Rate of interest to be received
||Not exceed 7.5% above the highest rate of interest offered on deposits by Nidhi and shall be calculated on reducing balance method viz. 20%
||A Nidhi shall not declare dividend exceeding 25% or
Such higher amount as may be specifically approved by the Regional Director for reasons to be recorded in writing and further subject to the following conditions-
An equal amount is transferred to General Reserve;
There has been no default in repayment of matured deposits and interest; and
It has completed with all the rules as applicable to Nidhis.
||Foreclosure of account
||Foreclosure of fixed deposit account or a recurring deposit account by the depositor subject to following conditions
– Nidhi shall not repay any deposit within a period of three months from the date of its acceptance;
– where at the request of the depositor, a Nidhi repays any deposit after a period of three months, the depositor shall not be entitled to any interest up to six months from the date of deposit;
– where at the request of the depositor, a Nidhi makes repayment of a deposit before the expiry of the period for which such deposit was accepted by Nidhi, the rate of interest payable by Nidhi on such deposit shall be reduced by two per cent. from the rate which Nidhi would have ordinarily paid, had the deposit been accepted for the period for which such deposit had run:
||Nidhi shall provide loans only to its Member subject to following limits:-
1 total deposits of Nidhi from Members is less than 2 Crore Rupees – Rs 2 Lakh
2. total deposits of Nidhi from Members is More than 2 crore but less than 20 Crore – Rs 7.50 Lakh
3. total deposits of Nidhi from Members is More than 20 crore but less than 50 Crore – Rs 12 Lakh
4. total deposits of Nidhi from Members is More than 50 Crore – Rs 15 Lakh
– Not make any fresh loans exceeding fifty per cent. of the maximum amounts of loans specified in clauses (1), (2), (3) or (4) if Nidhi has not made profits continuously in the three preceding FY
– In case of default in repayment of loan, member shall not eligible for further loan
||Security furnished members against loans
||1. Gold, silver and jewellery, repayment period not exceed one year.
2 immovable property subject to fifty per cent of the overall loan outstanding on the date of approval by the board, repayment period not exceed 7 years.
3. fixed deposit receipts, National Savings Certificates, other Government Securities and insurance policies
– shall be member of Nidhi
– shall hold office for a term up to ten consecutive years on the Board of Nidhi.
– Shall be eligible for re-appointment only after the expiry of two years from the date of expiry of ten years period.
||No Nidhi shall appoint or re-appoint an individual as auditor for more than one term of 5 years and audit firm for more than two terms of five consecutive years;
They are eligible for subsequent allotment after the expiration of two years
||Penalty for Non Compliance
||Company and Every officer – Rs 5,000
In case of continuing failure – Rs 500 for every day
||Buyback of Shares
||When shares are purchased by the Nidhi from a member on his ceasing to be a depositor or borrower, it shall not consider in reduction of Share Capital
||Payment of Dividend
||If the dividend is not claimed by a member within 30 days from the date of declaration, then the same may be paid by crediting it to the account of the member.
Further Section 127 deals with punishment for failure to distribute dividend. However for Nidhi companies, where the dividend payable to a member is one hundred rupees or less, it shall be sufficient compliance of the provisions of the section, if the declaration of dividend is announced in the local language in one local news paper of wide circulation and announcement of the said declaration is also displayed on the notice board of the Nidhis for at least three months