In this article we discuss how much a Nidhi Company can take deposits and from whom. These are the rules and limitations for taking deposits by Nidhi Companies :-
1. The ratio of Net Owned Funds of the Nidhi Company to deposits should not be more than 1:20.
2. Nidhi Company should not accept deposits from or lend to any person, other than its members.
3. They are not allowed to pledge any of the assets lodged by its members as security.
4. They should not take deposits from or lend money to anybody corporate.
5. They can’t issue or cause to be issued any advertisement in any form for soliciting deposit :-
Note : Private circulation of the details of fixed deposit schemes among the members of the Nidhi carrying the words “for private circulation to members only” shall not be considered to be an advertisement for soliciting deposits.
6. They should not pay any brokerage or incentive for mobilizing deposits from members or for deployment of funds or for granting loans.
7. Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares or shares equivalent to one hundred rupees.
Note : A savings account holder and a recurring deposit account holder shall hold at least one equity share of rupees ten.
8. Deposits may be accepted in the name of a minor, if they are made by the natural or legal guardian who is a member of Nidhi. But a minor shall not be admitted as a member of Nidhi.
9. A Nidhi shall not accept deposits exceeding twenty times of its Net Owned Funds (NOF) as per its last audited financial statements.
10. In the case of companies existing on or before 26th July, 2001 and which have accepted deposits in excess of the aforesaid limits, the same shall be restored to the prescribed limit by increasing the Net Owned Funds position or alternatively by reducing the deposit according to the table given below:
|Ratio of Net Owned Funds to Deposits (as on 31.3. 2013)||Date by which the company has to achieve prescribed ceiling of 1:20|
|a) More than 1:20 but upto 1:35||By 31.3. 2015|
|b) More than 1:35 but upto 1:45||By 31.3. 2016|
|c) More than 1:45||By 31.3. 2017|
11. The companies mentioned above shall not accept fresh deposits or renew existing deposits if such acceptance or renewal leads to violation of the prescribed ratio.
12. The ratio specified above shall also apply to incremental deposits.
13. Application form for deposit:-
(1) Every application form for placing a deposit with a Nidhi shall contain the following particulars, namely:-
(a) Name of Nidhi Company
(b) Date of incorporation of Nidhi Company
(c) The business carried on by Nidhi Company with details of branches, if any
(d) Brief particulars of the management of Nidhi Company (name, addresses and occupation of the directors, including DIN)
(e) Net profits of Nidhi Company before and after making provision for tax for the preceding 3 financial years, if applicable
(f) Dividend declared by Nidhi Company during the preceding 3 financial years
(g) Mode of repayment, Maturity Period & Interest Payable to the deposits
(h) The rate of interest payable to the depositor in case the depositor withdraws the deposit prematurely
(i) The terms and conditions subject to which the deposit may be accepted or renewed
(j) A summary of the financials of the company as per the latest 2 audited financial statements as given below:
(i) Net Owned Funds
(ii) Deposits accepted
(iii) Deposits repaid
(iv) Deposits claimed but remaining unpaid
(v) Loans disbursed against-
(a) immovable property
(c) gold and jewellery
(vi) Profit before tax
(vii) Provision for tax
(viii) Profit after tax
(ix) Dividend per share
(m) any other special features or terms and conditions subject to which the deposit is accepted or renewed.
(2) The application form shall also contain the following statements :-
(a) in case of non- payment of the deposit or part thereof as per the terms and conditions of such deposit, the depositor may approach the Registrar of companies having jurisdiction over Nidhi;
(b) in case of any deficiency of Nidhi in servicing its depositors, the depositor may approach the National Consumers Disputes Redressal Forum, the State Consumers Disputes Redressal Forum or District Consumers Disputes Redressal Forum, as the case may be, for redressal of his relief;
(c) a declaration by the Board of Directors to the effect that the financial position of Nidhi as disclosed and the representations made in the application form are true and correct and that Nidhi has complied with all the applicable rules;
(d) a statement to the effect that the Central Government does not undertake any responsibility for the financial soundness of Nidhi or for the correctness of any of the statement or the representations made or opinions expressed by Nidhi;
(e) the deposits accepted by Nidhi are not insured and the repayment of deposits is not guaranteed by either the Central Government or the Reserve Bank of India; and
(f) a verification clause by the depositor stating that he had read and understood the financial and other particulars furnished and representations made by Nidhi in his application form and after careful consideration he is making the deposit with Nidhi at his own risk and volition.
(3) Every Nidhi shall obtain proper introduction of new depositors before opening their accounts or accepting their deposits and keep on its record the evidence on which it has relied upon for the purpose of such introduction.
(4) For the purposes of introduction of depositors, a Nidhi shall obtain documentary evidence of the depositor in the form of proof of identity and address as under:
(a) Proof of Identity (any one of the following)
(ii) Unique Identification Number
(iii) Income-tax PAN card
(iv) Elector Photo Identity Card
(v) Driving license
(vi) Ration card
(b) Proof of address (any one of the following)
(ii) Unique Identification Number
(iii) Elector Photo Identity Card
(iv) Driving licence
(v) Ration card
(vi) Telephone bill
(vii) Bank account statement
(viii) Electricity bill
(documents referred to serial numbers (vi), (vii) and (viii) above shall not be more than two months old)
14. The fixed deposits shall be accepted for a minimum period of 6 months and a maximum period of 60 months.
15.Recurring deposits shall be accepted for a minimum period of 12 months and a maximum period of 60 months.
16. In case of recurring deposits relating to mortgage loans, the maximum period of recurring deposits shall correspond to the repayment period of such loans granted by Nidhi Company.
17. The maximum balance in a savings deposit account at any given time qualifying for interest shall not exceed Rs. 1,00,000/- at any point of time and the rate of interest shall not exceed 2%. above the rate of interest payable on savings bank account by nationalized banks.
18. A Nidhi may offer interest on fixed and recurring deposits at a rate not exceeding the maximum rate of interest prescribed by the Reserve Bank of India which the Non-Banking Financial Companies can pay on their public deposits.
19. A fixed deposit account or a recurring deposit account shall be foreclosed by the depositor subject to the following conditions :-
(a) a Nidhi shall not repay any deposit within a period of 3 months from the date of its acceptance.
(b) where at the request of the depositor, a Nidhi repays any deposit after a period of 3 months, the depositor shall not be entitled to any interest up to 6 months from the date of deposit.
(c) 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 2%. from the rate which Nidhi would have ordinarily paid, had the deposit been accepted for the period for which such deposit had run:
Note : In the event of death of a depositor, the deposit may be repaid prematurely to the surviving depositor or depositors in the case of joint holding with survivor clause, or to the nominee or to legal heir with interest up to the date of repayment at the rate which the company would have ordinarily paid, had such deposit been accepted for the period for which such deposit had run.
20. Every Nidhi shall invest and continue to keep invested, in unencumbered term deposits with a scheduled commercial bank (other than a co-operative bank or a regional rural bank),or post office deposits in its own name an amount which shall not be less than 10% of the deposits outstanding at the close of business on the last working day of the second preceding month:
Note : In cases of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such conditions and time limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10%.