NIDHI COMPANY

Nidhi means a company which has been incorporated as a Nidhi with the object of Cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and Which complies with rules of Chapter XXVI of Companies Rules, 2014.

Requirements for Nidhi Company


  • A Nidhi company to be incorporated under this Act shall be a Public Company
  • It shall have a minimum paid up equity share capital of Rs.5,00,000/-
  • No preference shares shall be issued.
  • If preference shares had already been issued by a Nidhi Company before commencement of this Act, such preference shares are to be redeemed in accordance with the terms of issue of such shares
  • The object of the company shall be cultivating the habit of thrift and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefits
  • It shall have the words ‘Nidhi Limited’ as part of its name

Requirement after Incorporation


Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has
  • Minimum number of members should be 200
  • Net owned funds shall be Rs.10,00,000/- or more (‘Net owned funds’ means the aggregate of paid up equity share capital and free reserved as reduced by the accumulated and intangible assets appearing in the last audited balance sheet)
  • Ratio of net owned funds to deposit shall be not more than 1:20
  • Unencumbered term deposits of not less than 10% of the outstanding deposits as specified in Rule 14
Acceptance of deposits
  • A Nidhi shall not accept deposits exceeding 20 times of its Net Owned Assets as per last audited financial statements.
  • The fixed deposits shall be accepted for a minimum period of 6 months and a maximum period of 60 months.
  • Recurring deposits shall be accepted for a minimum period of 12 months and a maximum period of 60 months.
  • In case of recurring deposits relating to mortgage loans, the maximum period of recurring deposits shall correspond to the repayment period of such loans granted by Nidhi.
  • The maximum balance in a savings deposit account at any given time qualifying for interest shall not exceed Rs.1,00,000/- and the interest shall not exceed 2% above the rate of interest payable to savings bank account by nationalized banks.
  • Every Nidhi shall invest and continue to keep invested, in unencumbered term deposits with a scheduled commercial bank or post office deposits in its own name an amount which shall not be less than 10% of the deposits outstanding at the close of the business on the last working day of the second preceding month.
  • In case of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such conditions and time limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10%

Loan

A Nidhi shall provide loans only to its members. The loans given to a member shall be subject to the following limits: