Acceptance of Deposit and provide loan to its member is one of the main reason for starting a Nidhi Company. We will discuss about how much Nidhi can take deposit from members and how much loan can provide to its members.
APPLICABILITY OF NIDHI RULES 2014
This rule shall apply to
♦ Every company which had been declared as a Nidhi or Mutual Benefit Society under sub- section 620A (1) of the Companies Act, 1956
♦ Every company functioning on the lines of a Nidhi company or Mutual Benefit Society but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under section 620A (1) of the Companies Act, 1956
♦ Every company incorporated as a Nidhi pursuant to the provisions of section 406 of the Companies Act 2013.
♦ Every company declared as Nidhi or Mutual Benefit Society under section 406 (1) of the Companies Act 2013.
HOW MUCH NIDHI CAN ACCEPT DEPOSIT FROM MEMBERS
A Nidhi shall not accept deposits exceeding twenty times of its Net Owned Funds (NOF) as per its last audited financial statements.
“Net Owned Funds” means the aggregate of paid up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet.
| For Example: ABC Nidhi Limited has Rs. 30 Lakh Net Owned Fund in that case ABC Nidhi Limited can accept deposit of Rs. 6 Crore from its members. |
WHAT CONTENT SHOULD BE INCORPORATED IN APPLICATION FORM OF DEPOSIT
Application form of deposit should have following particulars:
√ Name of Nidhi
√ Date of incorporation of Nidhi
√ The business carried on by Nidhi with details of branches, if any
√ Brief particulars of the management of Nidhi (name, addresses and occupation of the directors
√ Net profits of Nidhi before and after making provision for tax for the preceding three financial years
√ Dividend declared by Nidhi during the preceding three financial years
√ Mode of repayment of the deposit
√ Maturity period of the deposit
√ Interest payable on the deposit
√ The rate of interest payable to the depositor in case the depositor withdraws the deposit prematurely
√ The terms and conditions subject to which the deposit may be accepted or renewed
√ A summary of the financials of the company as per the latest two audited financial statements
√ any other special features or terms and conditions subject to which the deposit is accepted or renewed
ADDITIONAL INFORMATION SHOULD BE ADDED IN THE APPLICATION FORM OF DEPOSIT
√ 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 Bench of the National Company law Tribunal having jurisdiction over Nidhi;
√ 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;
√ 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;
√ 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
√ 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
√ 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.
WHAT IS THE TIME PERIOD OF DEPOSIT
| S.NO. | DEPOSIT | TIME PERIOD |
| 1. | Fixed Deposit | Minimum: 6 Month
Maximum: 60 Month |
| 2. | Recurring Deposit | Minimum: 12 Month
Maximum: 60 Month |
♦ In savings deposit account, the maximum balance shall not exceed Rs. One Lakh at any point of time for the purpose of interest and rate of interest shall not exceed two percent above the rate of interest payable on savings bank account by nationalised banks
NIDHI CAN PROVIDE LOAN TO ITS MEMBERS
| S.NO. | TOTAL AMOUNT OF DEPOSITS TAKEN FROM ITS MEMBERS | LOAN AMOUNT |
| 1. | Less than 2 Crore | Rs. Two lakh |
| 2. | More than two crore rupees but less than twenty crore rupees | Rs. Seven Lakh Fifty Thousand |
| 3. | More than Twenty Crore rupees but Less than Fifty Crore rupees | Rs. Twelve Lakh |
| 4. | more than fifty crore rupees | Rs. Fifteen Lakh |
√ Nidhi has not made profits continuously in the three preceding financial years in that case it shall not make any fresh loans exceeding fifty percent of the maximum amounts of loans specified above.
√ Amount of deposits shall be calculated on the basis of the last audited annual financial statements.
√ Nidhi shall give loans to its members only against the followingsecurities:
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- Gold, silver and jewellery
- Immovable property
- Fixed deposit receipts, National Savings Certificates, other Government Securities and insurance policies
√ Rate of interest to be charged on any loan given by a Nidhi shall not exceed seven and half percent above the highest rate of interest offered on deposits by Nidhi and shall be calculated on reducing balance method.
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