The centre today declared that it has amended Nidhi Rules 2014 to safeguard the interest of the general public.
The Ministry of Corporate Affairs said that rules provide that Public Companies desirous to function as Nidhis must obtain a prior declaration from the central government before accepting deposits.
Under the Companies Act, 2013, initially, there was no need for a company to get a declaration from the central government to function as a Nidhi company, the ministry added.
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“Such companies were required to only incorporate as a Nidhi and meet requirements under sub-rule (1) of rule 5 of Nidhi Rules viz., minimum membership of 200, Net Owned Fund (NoF) of Rs 10 lakh, NOF to deposit ratio of 1:20 and keeping 10 percent unencumbered deposits in scheduled commercial banks or post offices within one year of commencement of Nidhi Rules, 2014,” it said.
Also, a committee was constituted in the ministry to make recommendations on the issues arising from the implementation of the Companies Act, 2013.
“It was felt that the earlier provisions under the Companies Act, 1956 requiring the approval of the central government for declaration as Nidhi were appropriate since they provided a centralized and more restrictive framework for the regulation of such entities and accordingly section 406 of the Companies Act, 2013 was amended with effect from 15.08.2019 to bring back the requirement of declaration as a Nidhi by the central government,” an official release said.
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