The Hindu Business Line : RBF Nidhi resumes dues payment to depositors

RBF Nidhi has once again begun to repay the dues of its depositors; the first time since August 2001 that the nidhi has paid its dues to any one of its more than 1.6 lakh depositors.

Currently, it has started to pay the complete dues of its small depositors, those with deposits up to Rs 5,000. The development would settle the dues of 24,519 depositors at a total outgo of Rs 3.55 crore.

The current payment has come on the heels of the nidhi's decision to classify its depositors according to the urgency of their needs, and settle the most urgent cases first. RBF's board of directors approved the move to repay small depositors first in December 2003, and later in February this year.

The Department of Company Affairs challenged the board's decision. Therefore, RBF approached the Additional Principal Bench (Chennai) of the Company Law Board to pay the small depositors first. On May 14, the Bench upheld RBF's decision.

The Bench's order drew attention to the CLB's earlier orders. Companies had been allowed to differentiate between depositors and settle the accounts of the small depositors first.

The current development has taken place in the backdrop of a dispute among the members of RBF's board — the Central Government took charge of the nidhi in January 2000. The Board passed a no-confidence motion against the Chairman, former Karnataka High Court judge Mr T.N. Vallinayagam, recently.

Subsequently, one of the depositors approached the Madras High Court to offset the board's no-confidence motion, and a final verdict is awaited.

Mr Vallinayagam told Business Line, "In my opinion the board has to cooperate to find a solution, evolve a scheme on the lines suggested by associations themselves." He added that some of the depositors had favoured classifications according to the urgency of a depositor's need.