No.  5/37/99-CL-V

Government of India

Ministry of Law, Justice and Company Affairs

Department of Company Affairs

 

Shastri Bhawan, 5^th Floor, “A” Wing,

Dr. R. P. Road,  New Delhi-110 001

Dated: 01.05.2000

 

PRESS NOTE: 6/2000

 

 

 

Subject: Issue of Notification regarding  norms relating to functions of Nidhis.

 

 

         

          The Department of  Company Affairs had earlier, in exercise of the powers conferred by sub-section (1) of Section 637 A of the Companies Act, 1956 issued certain directions to be followed by Nidhi companies vide Notification  GSR 737 dated 01.11.1999.

 

 

2.       After considering   the numerous representations received from several Nidhi companies and Chamber of Nidhis, the Department of Company Affairs have modified some of the earlier  directions  to be followed by Nidhi companies. Vide Notification G.S.R.347(E) dated 25.04.2000.  The   norms made now are as under:-

 

 

(1)    Nidhis having  deposits of Rs.50 crore and    above shall be allowed

        incremental deposits  of 2% per annum of the deposits as on the date of

        last  balance  sheet  for the next ten years.

 

(2)       Nidhi companies were earlier asked to shut down their branches    situated

out side the State  in which they are registered within a period of three     years and to bring down the number of branches situated within the State or District in which they are registered  to not more than three  by five years.   Now, such Nidhis who have completed 25 years as on 1.11.1999 should not increase the number of  branches as it was existing on that date and  other Nidhi companies should   bring down  the number of branches  as it was existing on  1.11.99 within a period of ten years from the date of publication of this notification.

 

(3)       Nidhi companies were earlier not allowed to accept  deposits  for a period of less than six months.   This shall not include savings deposits  kept by members  separately earmarked for the limited purposes of crediting the loan and interest amounts  and periodically  withdrawn.

 

(4)       In case of retirement of two third of directors, or more in any one year, then, one third of the total number  of directors shall vacate office in the ensuing Annual General Meeting  immediately due and balance number  of directors shall retire at the two, subsequent  Annual General Meetings due later.

 

 

3.       A copy of this Press Note and Notification ( GSR 347(E)  ) dated 25.04.2000 has been placed at the Web-page of the Department of Company Affairs at the Internet Address http://www.nic.in/dca.

 

 

 

 

                                                                                       ( A. RAMASWAMY )                                       

Joint Secretary to the Government of India

Tel.No. 338 1226.