Nidhi Company is one of the categories of NBFC or in other words, it is the cheapest and easiest form of NBFC as well. Also, it is very easy form to register and does not require much capital. Anybody can register a Nidhi Company with only 5 Lac rupees minimum capital and with minimum of seven members.
The word “Nidhi” in Nidhi Company comes from a root word traditionally meaning “treasure” They are created primarily for the motive of cultivating the habit of thrift, savings and functioning for the mutual benefit of members by receiving deposits only from individuals enrolled as members and by lending only to individuals, also enrolled as members. The loans are given to the members at relatively reasonable rates for purposes such as house construction or repairs and are generally secured. The deposits mobilized by Nidhis are not much when compared to the organized banking sector.
Provisions Under Section 406 of Companies Act, 2013 and rules thereof
In this section, “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 class of companies.
Regulating Rules Nidhi Rules, 2014
A Nidhi company cannot
A Nidhi Company shall provide loans only to its members up to the below amount:
|S. No.||Deposit Slab||Permissible Loan Amount|
|1||Where total deposit amount is less than Two Crore||Rupees Two Lac|
|2||Where total deposit amount is or more than Two Crore but less than Twenty Crore||Rupees Seven Lac and Fifty thousand|
|3||Where total deposit amount is or more than Twenty Crore but less than Fifty Crore||Rupees Twelve Lac|
|4||Where total deposit amount is or more than Fifty Crore||Rupees Fifteen Lac|
Filing Requirement under the Companies Act, 2013
|Purpose||Form Number||Time Limit|
|Incorporation||SPICE Form||Not Applicable|
|Return of Statutory Compliances||NDH-1||Within ninety days from the close of the first financial year after its incorporation and where applicable, the second financial year|
|Application made to Regional director for extension of time for complying statutory compliance||NDH-2||within thirty days from the close of the first financial year|
|Half yearly return with the Registrar||NDH-3||within thirty days from the conclusion of each half year|
RBI REGISTRATION IN CASE OF NIDHI COMPANIES:
Nidhi Companies have been EXEMPTED from the requirement of registration under Section 45-IA of the RBI Act, 1934
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.