Power of Central Government or Company Law Board to accord approval, etc., subject to conditions and to prescribe fees on applications - GSR 603(E). - Companies Law

GSR 603 ( E ) , DATED 20-10-1997, ISSUED BY THE DEPARTMENT OF COMPANY AFFAIRS, MINISTRY OF FINANCE Subject:- Power of Central Government or Company Law Board to accord approval, etc., subject to conditions and to prescribe fees on applications GSR 603(E). In exercise of the powers conferred by sub-section (1) of section 637A of the Companies Act, 1956 (1 of 1956) the Central Government hereby directs that ( a ) no company declared as a Nidhi or Mutual Benefit Society under section 620A of the said Act, before the date of this notification (hereinafter referred to as such Nidhi or Mutual Benefit Society) shall, after the publication of this notification : ( i ) pledge any type of security lodged with it by its members; and ( ii ) give to any borrower loans or advances exceeding Rs. 7.5 lakhs or one per cent of the total deposits of the company, whichever is less ; ( b ) every such Nidhi or Mutual Benefit Society shall, after the publication of this notification ( i ) ensure that the total of its net owned fund and its preference share capital is not less than ten lakh rupees or such higher amount as the Central Government, in consultation with the Reserve Bank of India, may specify from time to time : Provided that the existing Nidhis or Mutual Benefit Societies shall be given time to reach the said minimum amount of ten lakh rupees within ( A ) a period of three years from the date of this notification ; or ( B ) such further period as the Central Government may, after recording the reasons in writing for so doing, extend : Provided further that when the minimum limit of the total net owned fund and preference share capital is enhanced beyond ten lakh rupees in future, the Nidhis and Mutual Benefit Societies shall be given reasonable time to augment such total; and ( ii ) ensure that interest rates on deposits accepted by and loans given by such Nidhi or Mutual Benefit Societies are in conformity with such regulations that may be issued by the Reserve Bank of India, from time to time. Explanation "Net owned fund" shall have the same meaning as assigned to it in the Reserve Bank of India Act, 1934. 2. The directions specified in sub-clauses ( i ) and ( ii ) of clause ( a ) and sub-clauses ( i ) and ( ii ) of clause ( b ) of this notification shall, as far as may be, apply to every company declared as a Nidhi or Mutual Benefit Society under section 620A of the said Act on or after the publication of this notification.