A Nidhi Company is different from a regular finance investment company or a Non-Banking Finance company (NBFC), as it deals only with its shareholders or members, for the main purpose of mutual benefits of its members. A Nidhi Company accept deposits only its members, and lends funds only to them on demand. Again, a Nidhi Company is not entitled to carry out business/activities related with hire purchase financing, leasing finance, chit funds, acquisition of securities issued by any corporate body, etc. or issue any debt instruments (such as reference share, debentures, etc.) in any form.
The rules, provisions, and regulations given in the Section 406 of the Companies Act 2013, and in the companies (Nidhi Companies) Rule of 2014, govern and regulate all Nidhi Companies in entire INDIA. Again the activities of Nidhi Companies fall under the ambit of RBI Directives which govern activities of NBFCs and other institutions dealing with financing and investment. RBI offers certain exemptions to the Nidhi Companies based on the fact that these Nidhi Companies deal only with its members, and with no outside people or investors.
A Nidhi company is registered as a Public Limited Company. Hence, the equirements for incorporation of a Nidhi company covered a minimum of three Directors and Seven Shareholders. However, the MOA of a Nidhi company must give proper space to the vital fact that, the main and ultimate objectives of the proposed company are to nurture and promote a habit of thriftiness and savings among its members, and accept deposits from or lend loans only to its members, for the mutual benefits of them.
Once a Nidhi Company is incorporated within a period of one year from the date of commencement of its activities, it must satisfy the following conditions
The following are three main and exclusive advantages offered by a Nidhi Company in India. This is a single office institution governed exclusively by its members, with no external involvement. This is immensely helpful to people with the middle to lower financial status, by virtue of providing loans at reasonable rates, with the minimum documentation and formalities.
Secured investments are guaranteed by such mutual benefit company, by its rigid membership structure.
Yes, because Government of India/Ministry of Corporate Affairs/RBI has framed the laws/rules to ensure the security and safety of deposits and Nidhi Company strictly abides by the rule and regulations framed by the Central Government.
Yes, because Government of India/Ministry of Corporate Affairs/RBI has framed the laws/rules to ensure the security and safety of deposits and Nidhi Company strictly abides by the rule and regulations framed by the Central Government.
Yes, because Government of India/Ministry of Corporate Affairs/RBI has framed the laws/rules to ensure the security and safety of deposits and Nidhi Company strictly abides by the rule and regulations framed by the Central Government.
Yes, because Government of India/Ministry of Corporate Affairs/RBI has framed the laws/rules to ensure the security and safety of deposits and Nidhi Company strictly abides by the rule and regulations framed by the Central Government.
