valid as on 09/12/2019

Font in blue effective from 15.08.2019

26.1.3 Nidhi Rules, 2014

3. Definitions.—(1) In these rules, unless the context otherwise requires,—

(a) “Act” means the Companies Act, 2013 (18 of 2013);

(b) “Doubtful Asset” means a borrowal account which has remained a Non-performing asset for more than two years but less than three years;

(c) “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;

(d) “Net Owned Funds” means the aggregate of paid up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet:

Provided that the amount representing the proceeds of issue of preference shares shall not be included for calculating Net Owned Funds.

 “Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift  and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with the rules made by the Central Government for regulation of such class of companies.

(e) “Non-Performing Asset” means a borrowal account in respect of which interest income or instalment of loan towards re payment of principal amount has remained unrealised for twelve months;

(f) “Standard Asset” means the asset in respect of which no default in re-payment of principal or payment of interest has occurred or is perceived and which has neither shown signs of any problem relating to re-payment of principal sum or interest nor does it carry more than normal risk attached to the business;

(g) “Sub-Standard Asset” means a borrowal account which is a Non-performing asset:

Provided that reschedulement or renegotiation or rephasement of the loan instalment or interest payment shall not change the classification of an asset unless the borrowal account has satisfactorily performed for at least twelve months after such reschedulement or renegotiation or rephasement.

( 2) used herein, but not defined in these rules and defined in the Act or in the Companies (Specification of definitions details) Rules, 2014 shall have the same meaning as assigned to them in the Act or in the said Rules.

The Central Government, on receipt of application (in Form NDH-4 along with fee thereon) of a public company for declaring it as Nidhi and on being satisfied that the company meets the requirements under these rules, shall notify the company as a Nidhi in the official Gazette:

Provided that a Nidhi incorporated under the Act on or after the commencement of the Nidhi (Amendment)Rules, 2019 shall file within sixty days from the date of expiry of:-

(a) one year from the date of its incorporation or
(b) the period up to which extension of time has been granted by the Regional Director under sub-ruIe (3) of rule 5:

Provided further that nothing in the first proviso shall prevent a Nidhi from filing Form NDH-4 before the period referred therein:

Provided also that that in case a company does not comply with the requirements of this rule, it shall not be allowed to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of Allotment).

 Inserted vide the Nidhi (Amendment) Rules, 2019 dated 01.07.2019 w.e.f., 15.08.2019. To view the Notification, Click Here.
 words and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) shall have the meanings respectively assigned to them in those Acts
Inserted vide the Nidhi (Amendment) Rules, 2019 dated 01.07.2019 w.e.f., 15.08.2019. To view the Notification, Click Here.
To view the Return, Click Here.

The Nidhi (Amendment) Rules, 2019 dated 01.07.2019 w.e.f., 15.08.2019


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