General restrictions or prohibitions
- No Nidhi shall-
(a) carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate;(b) issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;(c) open any current account with its members;(d) acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi;
Explanation - For the purposes of this sub-rule, “control” shall have the same meaning assigned to it in clause (27) of section 2 of the Act;
(e) carry on any business other than the business of borrowing or lending in its own name:Provided that Nidhis which have adhered to all the provisions of these rules may provide locker facilities on rent to its members subject to the rental income from such facilities not exceeding twenty per cent. of the gross income of the Nidhi at any point of time during a financial year.(f) accept deposits from or lend to any person, other than its members;(g) pledge any of the assets lodged by its members as security;(h) take deposits from or lend money to any body corporate;(i) enter into any partnership arrangement in its borrowing or lending activities;(j) issue or cause to be issued any advertisement in any form for soliciting deposit:Provided that private circulation of the details of fixed deposit schemes among the members of the Nidhi carrying the words “for private circulation to members only” shall not be considered to be an advertisement for soliciting deposits.(k) pay any brokerage or incentive for mobilising deposits from members or for deployment of funds or for granting loans.
Ozg Nidhi / Mutual Benefit Co. Experts