Financial Daily from THE HINDU group of publications
Sunday, May 08, 2005
Financial Daily from THE HINDU group of publications Sunday, May 08, 2005 |
|
|
|
|
|
Money & Banking
-
NBFCs Ministry plans panel to curb defaults by Nidhis, MBS Richa Mishra
New Delhi , May 7 THE Ministry of Company Affairs is planning to set up an expert group to examine any lacunae in the existing norms governing the Nidhi companies or Mutual Benefit Societies (MBS) and to suggest measures to curb instances of default by such entities. The move has been prompted by continuous instances of default by Nidhi companies or MBS, official sources said. The Government wants to take immediate steps to curb such defaults and, if need be, it would like to further tighten the norms governing such entities, as it is mainly the small investors who are affected. The Nidhis are a type of non-banking finance companies (NBFCs) where a borrower would have to become a member first. Noting that Nidhi companies required improved regulatory framework to strengthen their functioning and also to instil confidence in the minds of the investors, the Ministry had notified necessary changes in the norms in July 2001. The notifications prescribing the supervisory framework and prudential norms, on the pattern of NBFCs, were later revised in April 2002 at the instance of Chamber of Nidhis and Federation of Benefit Funds. The Ministry is also understood to have taken up with the Reserve Bank of India issues to address any mismatch or overlaps between the RBI Act and the Company Law norms pertaining to such companies. Sources told Business Line that the Government would like to work in synergy with the RBI and resolve the issue if any, at the earliest. Despite stringent parameters set by the Government, it continues to receive depositor complaints against the defaulting entities, including the Chennai-based RBF Nidhi. As per information available with the Ministry as on March 31, 2005, there are 244 Nidhis. In 2004, the Government had declared almost 20 companies as Nidhis out of which more than a dozen were from Tamil Nadu. The Ministry has been collecting information from various sources, including the Company Law Board (CLB) Southern region, on the cases where the Nidhis have defaulted. The Government had recently reconstituted the RBF Nidhi's Board. The Nidhis, which have defaulted, include Kuber Mutual Benefits Ltd, Trikone Mutual Benefits, Ican Mutual Benefit and Alwarpet Benefit Fund. Further, it has been brought to the MCA's notice that despite the CLB's orders, there are instances of default by such entities.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|