Constitution of committee for examining various aspects of functioning of nidhi companies, etc. - Companies Law - ORDER NO. 5/7/2000-CL-V,

ORDER NO. 5/7/2000-CL-V, DATED 23-3-2000, ISSUED BY THE DEPARTMENT OF COMPANY AFFAIRS Subject:- Constitution of committee for examining various aspects of functioning of nidhi companies, etc. 1. The Central Government hereby constitutes a Committee to examine various aspects of the functioning of nidhi companies and suggest an appropriate policy frame work for overall improvement of the nidhi companies and to instill and restore the confidence of the investing public especially the small depositors and thereby facilitate the healthy functioning of the nidhi companies. Further, the Committee will examine alternative mechanism to regulate and facilitate nidhi companies to play key role in mobilising and gainfully investing small savings and examine in depth various aspects of the operation dynamics, existing deficiencies and suggest appropriate policy prescription for further improving their viability resilience and performance. The Committee will consist of :- 1. Shri P. Sabanayagam, Former Union Secretary, Chief Secretary, Government of Tamil Nadu, Chennai Chairman 2. Dr. S. Radhakrishnan, Prof. of Economics, Chennai Member 3. Shri N.R. Sridharan, Chartered Accountant, Chennai Member 4. Shri T.S.V. Panduranga Sharma, Chartered Accountant, New Delhi Member 5. Shri V.S.N. Murthy, Chief General Manager, Department of Supervision, NBOD, RBI, Mumbai Member 6. Shri H. Raja, Chartered Accountant, Karaikudy Member 7. Shri Mathradas Mehta, Mumbai Member 8. Shri R. Vasudevan, Director, Department of Company Affairs Member 9. Shri V.S. Rao, Regional Director (SR), Department of Company Affairs, Chennai Member -Secretary 2. The Committee will also examine and make recommendations with regard to : ( i ) evaluate the present mechanism for monitoring the activities of nidhi companies and suggest improved mechanisms to sustain and strengthen to nidhi companies; ( ii ) suggest prudential norms for deployment of funds of nidhi on the lines of NBFCs and develop guidelines for adoption; ( iii ) suggest a supervisory framework to track non-compliance of such norms and examine feasibility of bringing in deposit insurance cover and some sort of rating that can be imposed on these nidhi companies; ( iv ) develop a future long-term growth plan for nidhi companies for development and proper functioning of nidhi companies to play a role in the context of financial reforms, inter alia, technological developments, emerging needs of stakeholders and national imperatives. The Committee may consider such other matters incidental to as relevant. 3. The Committee may consult other experts in the field as and when necessary. 4. The Committee will submit its report within a period of three months from the date of issue of this notification/order. 5. Department of Company Affairs will be the nodal Department.