Definitions of Common Terms used, as described by Nidhi Company Rules, 2014 – Companies Act 2013
In exercise of the powers conferred under sub-section (1) of section 406 read with sub-sections (1) and (2) of 469 of the Companies Act,2013, the Central Government hereby makes the following rules, namely:-
1. Short title and commencement – (1) These Rules may be called Nidhi Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Application – These rules shall apply to,-
(a) every company which had been declared as a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956;
(b) every company functioning on the lines of a Nidhi company or Mutual Benefit Society but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956; and
(c) every company incorporated as a Nidhi pursuant to the provisions of section 406 of the Act.
3. Definitions – (1) In these rules, unless the context otherwise requires,-
(a) “Act†means the Companies Act, 2013 (18 of 2013);
(b) “Doubtful Asset†means a borrowal account which has remained a nonperforming asset for more than two years but less than three years;
(c) “Loss Asset†means a borrowal account which has remained a nonperforming asset for more than three years or where in the opinion of the Board, a shortfall in the recovery of the loan account is expected because the documents executed may become invalid if subjected to legal process or for any other reason;
(d) “Net Owned Funds†means the aggregate of paid up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet:
Provided that the amount representing the proceeds of issue of preference shares shall not be included for calculating Net Owned Funds.
(e) “Non-Performing Asset†means a borrowal account in respect of which interest income or instalment of loan towards repayment of principal amount has remained unrealised for twelve months;
(f) “Standard Asset†means the asset in respect of which no default in repayment of principal or payment of interest has occurred or is perceived and which has neither shown signs of any problem relating to repayment of principal sum or interest nor does it carry more than normal risk attached to the business;
(g) “Sub-Standard Asset†means a borrowal account which is a non performing asset:
Provided that reschedulement or renegotiation or rephasement of the loan instalment or interest payment shall not change the classification of an asset unless the borrowal account has satisfactorily performed for at least twelve months after such reschedulement or renegotiation or rephasement.
Words and expressions used herein, but not defined in these rules and defined in the Act or in the Companies (Specification of definitions details) Rules, 2014 shall have the same meaning as assigned to them in the Act or in the said Rules.
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