“Nidhi Company – where your savings grow and loans flow, for members!”
According to the section 406 of the Companies Act 2013, “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 such rules as are prescribed by the Central Government for regulation of such companies.
| S.No | Name | Nidhi Company Act |
|---|---|---|
| 1 | Section & Authority | Section 406 of the Companies Act, 2013 effective from 01.04.2014. Controlled by Ministry of Corporate Affairs (MCA). |
| 2 | Status | Incorporated as a Public Limited Company. |
| 3 | Objective | To cultivate thrift and savings among members to receive/lend only from/to the members for mutual benefit. |
| 4 | Minimum Shares | 10 Equity Shares of ₹10 each. |
| 5 | Branches | May open up to 3 branches within a district after 3 years of continuous profit. More than 3 or outside district needs Regional Director approval. |
| 6 | Branch Restriction | No branches outside State or without updated filing of financials and returns. |
| 7 | Acceptance of Deposits | Not exceeding 20 times of Net Owned Funds. |
| 8 | Period of Deposits | FD: 6–60 months, RD: 12–60 months, RD linked with Mortgage Loan: till loan tenure. |
| 9 | Interest on Deposits | Savings ≤ 5%, FD/RD ≤ 12.5%. Interest earning on Savings Deposit Max ₹1 Lakh. |
| 10 | Interest on Loans | Not exceeding 7.5% above highest deposit rate (Max 20%). |
| 11 | Dividend | Max 25% or as approved by RD; subject to compliance and no default in repayments. |
| 12 | Foreclosure on Deposits | No closure before 3 months; 3–6 months: no interest; after 6 months: 2% less than the applicable rate for the period run. |
| 13 | Loans | Members only: Below ₹2Cr deposits – ₹2L, ₹2–20Cr – ₹7.5L, ₹20–50Cr – ₹12L, >₹50Cr – ₹15L |
| 14 | Loan Security / Amount / Period | Gold/Silver: 80%, 1 yr; Property: 50% of FSV 7 Yrs; FD/NSC: 80%, till maturity; Insurance: 90% of surrender value, 1 yr. |
| 15 | Director | Must be a member; max 10 yrs; Re-eligible for appointment after 2 yrs cooling period. |
| 16 | Auditor | Individual: 5 yrs; Firm: 2 terms of 5 yrs each; Re-appointment after 2 yrs Cooling Period. |
| 17 | Buyback | Shares purchased from leaving member not treated as capital reduction. |
