Govt plans panel to check fraud by nidhi cos

At present 89 applications for registering of nidhi companies are pending with the Department of Company Affairs.

The RBI so far has not given its approval because some of these companies which have been functioning as NBFC under RBI regulations have defaulted thousands of crores of rupees from public deposits and investigations by RBI against them are still on. The main charge against them is that they have not properly accounted for the depositors money and their liquidity ratio is not as per RBI guidelines. Unless the RBI gives clearence certificates these NBFC conmpanies cannot be allowed to be converted into nidhi companies.

Meanwhile, the Department of Company Affairs has denotified two nidhi companies in Uttar Pradesh and apppointed government directors on a Chennai based nidhi company. The Department of Company Affairs has also toughened the regulatory norms of nidhi conmpanies. Revised guidelines to this effect were issued in November.

The RBI had recently allowed non-banking finance companies (NBFCs) to maintain up to five per cent of their liquid assets in the form of term deposits with scheduled commercial banks. The NBFCs are at present required to keep 15 per cent SLR. The measure is part of a series of amendments to NBFC directions announced on Thursday.

The RBI has also stipulated that any NBFC looking to change its name to take advantage of the stock market sentiments – particularly in the info-tech sector – will have to seek the central bank’s approval before applying to the registrar of companies. The apex bank has reiterated that the NBFCs having net-owned funds (NOF) below Rs 25 lakh may not be granted general exemption and their applications for certificates of registration may not be considered. The RBI deadline for NBFCs to shore up their NoF to Rs 25 lakh expired on January 9, 2000. However, NBFCs not holding public deposits are no longer required to submit liquid asset return.

The RBI has also introduced certain regulations over opening and closing of branches with an obligation of the auditors to report non-compliance of these directions to the Reserve Bank. “There are reports of some companies including NBFCs vanishing after mobilisation of capital, deposits, etc. from public, raising grave supervisory concerns. Since the present regulatory framework is aimed at ensuring that registration is granted only to serious and bonafide players in the NBFC sector, it has been decided to place on record details of permanent account number issued by income tax authorities, of each of the directors of all NBFCs…," a recent RBI notification said.