The Chamber of Nidhi Companies has reiterated its strict adherence to compliance and the right to accept deposits from the public.
The clarification comes in the wake of recent rumours following a couple of incidents and controversies in the financial sector of the state.
“As Kerala is home to more than 15 per cent of the nidhi companies in the country, we play a pivotal role in the state’s economy,” said Ashley Thomas Mulamoottil, President, Chamber of Nidhi Companies, the body that represents 150 nidhi companies that have more than ten branches each. The State’s organised lending sector is worth Rs 2 lakh crore annually, and its 900-odd big and small nidhi companies account for nearly Rs 18,000 crore.
According to the Nidhi Rules 2014, nidhi companies can accept deposits 20 times of their total assets – that is their net owned funds. The maximum maturity period allowed for recurring and fixed deposits in a nidhi company is five years. They are also required to keep 10 per cent of term deposits as unencumbered deposits.
These companies have been formed with the intent of cultivating the thrift and savings habit amongst the public. The nidhi companies offer semi-banking services in the rural areas, thus providing last-mile banking facilities to the unbanked population. Their main business is secured loans such as gold loans or property loans.
According to him, nidhi companies operate under stringent norms prescribed in the rules and they have to make monthly, half-yearly and annual compliance related filings to the Registrar of Companies. Any failure to comply with the strict norms invites penalties and a strike off from the register of companies.
The maximum interest a nidhi company can offer for its fixed deposits and recurring deposits is 12.5 per cent and the maximum it can offer on its savings account is 2 per cent above nationalised banks.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.