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TMI BlogPrudential Norms for NidhisX X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act, 1956 (1 of 1956), the Central Government hereby directs that :- 1. Every company declared as a Nidhi or Mutual Benefit Society under section 620A of the Companies Act, (hereinafter referred to as such Nidhi or Mutual Benefit Society) after the publication of this notification shall adhere to the following prudential norms for revenue recognition and classification of assets in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e outstanding amount if the proceedings for sale of mortgaged property have been initiated in a court of law within the previous two years of the interest, income or instalment remaining unrealised. In no case the value of collateral security would be more than the value assessed at the time of grant of loan. The provisions should be made out of current year's profit and so distinctly disclosed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars. (4) "Loss Asset" will be that borrowal account which remained non-performing for more than two years or where the documents executed may become invalid if subjected to legal processes, as per the opinion of the Nidhi, or its internal auditor or by the inspecting authority during the course of its inspection; (5)"Non-performing asset" will be that borrowal account where interest income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prudential norms for revenue recognition and classification of assets shall be applicable to all Nidhi companies notified under section 620 A of the Companies Act, 1956 before or after the publication of this notification and to all potential Nidhi companies desiring to get Nidhi status under the said Act. 3. The Central Government if satisfied that the circumstances have arisen and if found in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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