Quick Summary
Nidhi Company is a type of NBCI (Non-Banking Financial Company) that borrows from and lends to its members only, promoting savings among members.
Nidhi Company is governed by Section 406 of the Companies Act, 2013 and Nidhi Rules, 2014. It is formed for the primary object of cultivating thrift and savings among its members, receiving deposits from and lending to its members only for their mutual benefit.
Key Features
- Minimum 7 members, 3 directors
- Minimum paid-up capital: ₹10 lakhs
- Can only deal with members (not public)
- Cannot issue preference shares
- Branches allowed after 3 years of profits
- No RBI approval required
Restrictions
- Cannot advertise for public deposits
- Cannot lend to non-members
- Cannot accept deposits from non-members
- Cannot issue debentures or bonds
- Cannot open current account with members
Post-Registration Requirements
- Must have 200+ members within 1 year
- Net owned funds must be ₹10 lakhs+
- Unencumbered deposits 10% or more
- File NDH-1 within 90 days of close of FY
- File NDH-3 (half-yearly return)
Key Points
- Mutual benefit company
- Deals with members only
- Minimum capital ₹10 lakhs
- No RBI approval needed
- Promotes savings among members