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Nidhi Company is a company incorporated under Companies Act, 2013 with the object of cultivating the habit of thrift and deposit among members. This means that a Nidhi Company can accept deposit and lend money to its members subject to certain restriction as may be imposed on it from time to time.
IS NIDHI COMPANY REQUIRED TO APPLY FOR NBFC LICENSE OR ANY OTHER RBI REGISTRATIONS?
No, Nidhi Company is solely governed by the provisions of Companies Act, 2013 and Nidhi Rules, 2014 and RBI has interference in the working of Nidhi Company.
RBI has vide Notification Clarified that Nidhi Companies i.e. a non-banking financial company -notified under section 620A of the Companies Act, 1956 (Act 1 of 1956), as Nidhi Company shall be exempt from the provisions of Chapter III B of the RBI Act, 1934.
RESTRICTIONS ON NIDHI COMPANY?
After Registration Nidhi Company must fulfill following conditions in order to keep working:
- Must add 200 members within 1 year of its incorporation.
- Must lend money and accept deposit only to/from its members.
- Must not advertise about its services in any manner what so ever.
- Must not open office in other district and a maximum of 2 other offices in the same state
WHAT KIND OF DEPOSITS A NIDHI CAN ACCEPT?
A Nidhi can accept following type of deposits
- Fixed Deposit
- Recurring Deposit
- Saving Deposit
Rate of interest on these deposits shall not exceed rate of interest prescribed by RBI for NBFC companies.
A company shall maintain not less that 10% of the total deposits in the form of unencumbered term deposit, in the form of Fixed Deposit at any Nationalized Bank or Post Office.
A Nishi can lend money in the form of loan only to its members, loans may be against:
- Immovable Property
- Fixed Deposits
- Gold, etc.
Rate of interest charged on loan shall not in any case exceed 7.5% of the highest rate of interest provided by Nidhi on Deposits.
Rate of Interest on Loan shall be calculated by using reducing interest method.
Conditions for membership of a Nidhi Company:
- Member must be an Individual and an Indian Citizen.
- He must subscribe to at least share worth Rs.100/- of the Nidhi Company
- He must follow the terms and conditions as stipulated in his membership agreement.
Documents/Information Required for Incorporating a NIDHI Company
Members (Minimum 7)
- A copy of PAN
- A copy of Voter ID or Driving License or Aadhar Card
- Up to date bank passbook or bank statement or utility bill in the name of members
- 2 Passport size photograph
- Mobile Number and E mail Id
- For Registered Office
A copy of Electricity Bill or A copy of Gas bill and Gas Passbook
- Company Name (minimum 4)
The Name of the company ends with the word NIDHI LIMITED