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TMI BlogChapter XXVI - Draft Rules under Companies Act, 2013X X X X Extracts X X X X X X X X Extracts X X X X ..... tful Asset" means a borrowal account which has remained a non-performing asset for more than two years but less than three years. (iii) "financial year" means financial year as defined in sub-section (41) of section 2 of the Act. (iv) "Loss Asset" means a borrowal account which has remained a non-performing asset for more than three years or where in the opinion of the Board, a shortfall in the recovery of the loan account is expected because the documents executed may become invalid if subjected to legal process or for any other reason. (v) "Member" means a member as defined in sub-section (55) of section 2 of the Act. (vi) "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: Provided that: (a) A reserve shall be considered as a "free reserve" if it is available for distribution as dividend. (b) The amount representing the proceeds of issue of preference shares shall not be included for calculating Net Owned Funds. (vii) "Non-Performing Asset" means a borrowal account in respect of which interest income and/or instalment of loan towards repayment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable, the second financial year, the Nidhi shall file a Return of statutory compliances in Form No. 26.1 along with such fee as provided in Annexure 'B' with the Registrar duly certified by a company secretary in practice or chartered accountant or cost accountant. (iii) If a Nidhi is not in compliance with clauses (a) or (d) of sub-rule (i) above, it shall within 30 days from the close of the first financial year, apply to the Regional Director in Form No. 26.2 along with fee specified in Annexure 'B' for extension of time and the Regional Director may consider the application and pass orders within 30 days of receipt of the application. (iv) If the failure to comply with sub-rule (i) of this Rule extends beyond the second financial year, the Nidhi shall not accept any further deposits from the commencement of the second financial year until clauses (a) and (d) of sub-rule (i) of this rule are complied with, besides being liable for penal consequences as provided in the Act. 7. General restrictions/prohibitions No Nidhi shall- (i) carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es: Provided that the account holders of savings account and recurring deposit only may hold at least one equity share of rupees ten. 9. Membership (i) No Nidhi shall admit any body corporate or trust as a member. (ii) Except as otherwise permitted under these Rules, every Nidhi shall ensure that its membership is not reduced to less than two hundred members at any time. (iii) No minor shall be admitted as a member. However, 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 the Nidhi. 10. Net owned Funds: Every Nidhi shall maintain Net Owned Funds (excluding the proceeds of any preference share capital) of not less than ten lakh rupees or such higher amount as the Central Government may specify from time to time. 11 Branches: (i) A Nidhi may open branches, only if it has earned net profits after tax continuously during the preceding three financial years. (ii) Subject to compliance with the aforesaid sub-rule: (a) A Nidhi may open up to three branches within the district. (b) If a Nidhi proposes to open more than three branches within the district or any branch outside the district, it shall obtain the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposit may be accepted / renewed. (l) A summary of the financials of the company as per the latest two 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 (b) Deposits (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 / renewed. (ii) 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 the Nidhi. (b) in case of any deficiency of the Nidhi in servicing its depositors, the depositor may approach the National Consumers Disputes Redressal Forum, the State Level Consumers Disputes Redressal Forum or District Level Consumers Disputes Redressal Forum, as the case may be, for relief. (c) A declaration by the Board of directors to the effect that the financial posit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of time and the rate of interest shall not exceed two per cent above the rate of interest payable on savings bank account by nationalized banks. (iv) 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. (v) A Fixed Deposit Account or a Recurring Deposit Account may be foreclosed by the depositor subject to the following conditions: (a) a Nidhi shall not repay any deposit within a period of three months from the date of its acceptance; (b) where at the request of the depositor, a Nidhi repays any deposit after a period of three months, the depositor shall not be entitled to any interest up to six 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 the Nidhi, the rate of interest payable by the Nidhi on such deposit shall be reduced by two percent from the rate which the Nidhi would have ordinarily paid, had the deposit been accepted for the period for which such deposit had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment period of such loan shall not exceed one year. (b) Immovable property Provided that the total loans against immovable property (excluding mortgage loans granted on the security of property by registered mortgage, being a registered mortgage under section 69 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, the individual loan shall not exceed fifty percent of the value of property offered as security and the period of repayment of such loan shall not exceed seven years. (c) Fixed deposit receipts, National Savings Certificates, other Government Securities and insurance policies Provided that such securities duly discharged shall be pledged with the Nidhi and the maturity date of such securities shall not fall beyond the loan period or one year whichever is earlier: Provided further that in the case of loan against fixed deposits, the period of loan shall not exceed the unexpired period of the fixed deposits. 17. Rate of interest The rate of interest to be charged on any loan given by any Nidhi shall not exceed seven and half per cent above the highest rate of interest offered on d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. (3). (a) In respect of Mortgage Loans, the classification of assets and the provisioning required shall be as under: NATURE OF ASSET PROVISION REQUIRED Standard Asset No provision Sub-standard Asset 10% of the aggregate outstanding amount Doubtful Asset 25% of the aggregate outstanding amount Loss Asset 100% of the aggregate outstanding amount (b) The estimated realisable value of the collateral security to which a Nidhi has valid recourse may be reduced from the aggregate outstanding amount, if the proceedings for the sale of the mortgaged property have been initiated in a court of law within the previous two years of the interest, income or instalment remaining unrealised. (4). Time limit for compliance In case of companies which were incorporated on or before 26-07- 2001, such companies shall make provisions in respect of loans disbursed and outstanding as on 31-03-2002 for income reversal and non-performing assets as per table given below: For the year ended Extent of provision 31-03-2014 31-03-2015 31-03-2016 Un-provided balance on equal basis over the three years as specified in the preceding column. (5). A Nidhi may, if it so desires, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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