Nidhi Company
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Nidhi Company
It is a kind of company whose main objective is to encourage and cultivate the habit of savings among members of the company itself. Main work of the Nidhi company is borrowing and lending money to members only. This company is registered under Section 406 of Companies Act, 2013. The funds are contributed within a company only from its members to its members.
Background of the Nidhi company is the Non-banking Indian finance sector. RBI has exempted Nidhi company from its regulations and directions applicable on NBFCs.
Objectives
Savings – A Nidhi company has the right to open Savings bank account of its members to promote & encourage their habit of saving.
Fund – Nidhi company can also raise funds. Nidhi company is safest way to raise funds as it has been done from general public through RDs, FDs and deposits.
Loan – Nidhi company can lend money to its members only. They can only provide secured loans and not unsecured loans.
Micro banking – There are some remote areas which do not have nationalised banks and NBFCs. Nidhi company provides banking services at these places.
Requirements:
- Company name must have suffix – Nidhi Limited
- Minimum paid up capital is Rs. 5,00,000/-
- Nidhi Company cannot issue preference shares
- Objective must be to develop habit of saving and services of this company is restricted to its members only
Certain conditions needs to be fulfilled by Nidhi company within period of one year of incorporation :
- Minimum number of directors – 3
- Minimum number of shareholders – 7
- Minimum number of members of company – 200
- Net owned funds – Rs. 10 lakhs or more
- Unencumbered deposits – 10 percent or higher (of outstanding deposits)
- Ratio of deposits -not more than 1:20 of net owned funds
Requirements:
- Company name must have suffix – Nidhi Limited
- Minimum paid up capital is Rs. 5,00,000/-
- Nidhi Company cannot issue preference shares
- Objective must be to develop habit of saving and services of this company is restricted to its members only
Certain conditions needs to be fulfilled by Nidhi company within period of one year of incorporation :
- Minimum number of directors – 3
- Minimum number of shareholders – 7
- Minimum number of members of company – 200
- Net owned funds – Rs. 10 lakhs or more
- Unencumbered deposits – 10 percent or higher (of outstanding deposits)
- Ratio of deposits -not more than 1:20 of net owned funds
