GOVERNMENT OF INDIA
MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS
DEPARTMENT OF COMPANY AFFAIRS
NOTIFICATION
New Delhi, the 30th April, 2002
G.S.R 308 (E).- In exercise of the powers conferred by sub-section (1) of section 637 A of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following amendments in the Notification of the Government of India, Ministry of Law, Justice and Company Affairs (Department of Company Affairs) No GSR 555(E) dated 26.7.2001, and published in the Gazette of India, in Part II, Section 3, sub-section (i) dated 26.7.2001, namely: –
In the said notification, in clause (1), –
(i) in sub-clause (a), –
(a) for item (iv), the following item shall be substituted, namely:-
“(iv) issue any equity share of nominal value less than rupees 10/- :
provided that this shall apply to Nidhi companies incorporated on and after the issue of the said notification i.e. 26.7.2001:
provided further that no service charge shall be levied for issue of shares”;
(b) in item (v), at the end, the following proviso shall be inserted, namely: –
“provided that this restriction shall not apply to allotment of shares up to the face value of Rs.100/- to new deposit holders or borrowers and in respect of qualification shares held by Directors” ;
(ii) in sub-clause (b), in item (iii), in the provisos, for the figures “2002” occurring at both places, the figures “2003” shall be substituted;
(iii) in sub-clause (d), –
(A) in item (i), for the first proviso, the following proviso shall be substituted, namely:-
” provided in the case of Nidhis incorporated on or before 26th July,2001 having deposits in excess of the aforesaid limits, the same shall be brought to the prescribed limit by increasing the Net Owned Fund position or alternatively by reducing the deposit according to the time table given below:
| Ratio of Net Owned Fund to Deposits (as on 31.3.2001) | Date by which the company has to achieve prescribed ceiling of 1:20 |
| a) More than 1:20 but up to 1:25 | By 31.3.2004 |
| b) More than 1:25 but up to 1:40 | By 31.3.2005 |
| c) More than 1:40 but up to 1:80 | By 31.3.2006 |
| d) More than 1:80 and above | By 31.3.2007 |
(B) in item (i), for the explanation, the following explanation shall be substituted, namely: –
Explanation: – “Net Owned Funds” means the aggregate of paid up equity capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet of the company. A reserve shall be considered as a “free reserve” if it is available for distribution as dividend. Further, the amount representing the proceeds of issue of preference shares shall not be included for calculating Net Owned Funds. However, for Nidhis or Mutual Benefit Societies existing on or before 26.7.2001, the proceeds of issue of preference shares shall be included for calculation of Net Owned Funds up to the financial year 31.3.2004″;
(iv) in item (ii), in para (B), the following proviso shall be inserted namely:-
” provided that in the 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 the Nidhi company”;
(v) in sub-clause (e)
(a) in item (A), after sub-item (xi), the following item shall be inserted, namely: –
” (xia) a summarised financial position of the company as in the latest audited balance sheet”.
Explanation: “summarised financial position” means the summarized financial position as referred to in clause (h) of sub-rule (2) of rule (3) of the Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, 1977 published under section 642 of the Companies Act, 1956″.
(b) in item (A), after sub-item (xii), the following proviso shall be inserted, namely: –
“provided that the provisions of sub-clause (e) shall apply from first day of June, 2002 to Nidhi companies or Mutual Benefit Societies existing on or before the 26th July, 2001″.
(vi) in sub-clause (f), in item (i), in sub-item (A), the following proviso shall be inserted, namely; –
“provided that this provision shall not be applicable to the account holders of savings account and recurring deposit only”;
(vii) in sub-clause (g), the following proviso, shall be inserted, namely: –
“provided that in the case of Nidhi companies or Mutual Benefit Society existing on or before 26th July, 2001, the said prescribed limit of 10% of the total deposits shall be achieved progressively as per schedule given below
SCHEDULE
| Date and year as on | Percentage to be achieved |
| 31.3.2002 | 2% of the total deposits |
| 31.3.2003 | 5% of the total deposits |
| 31.3.2004 | 10% of the total deposits |
Provided further that temporary withdrawal shall be permitted with the prior approval of the Regulatory Authority for the purpose of repayment to depositors in cases of unforeseen commitments, subject to certain conditions and time limit which may be allowed by the such Authority for restoration of prescribed limit of 10%”;
(viii) in sub-clause (h), in item (i), at the end of sub-item (B) but before explanation, for the existing proviso, the following proviso shall be substituted, namely: –
“provided that the loans against immovable property (excluding mortgage loans granted on the security of property by registered mortgage, being a registered mortgage under section 59 of the Transfer of Property Act, 1882) shall not exceed fifty percent of the overall loan outstanding on the date of approval by the board and the individual loan shall not exceed fifty percent of the value of property offered as security. The period of such loan shall not exceed seven years”;
(ix) in sub-clause (h), in item (i), in sub-item (C), after the first proviso, the following proviso shall be inserted, namely: –
” provided further that in the case of loan against fixed deposits, the period of loan shall not exceed the remainder period of fixed deposits”;.
(x) in sub-clause (h), in item (ii), for the words “five percent“, the words “seven and a half percent” shall be substituted;
(Rajiv Mehrishi)
Joint Secretary
