"Nidhi companies are effectively non-banking financial companies and are engaged in the business of accepting deposits and making loans to their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.”

It’s a Public Limited Company which can accept deposits from its own Members and lend the same fund to its own members. It’s actually a Mutual Benefit Company in workings.

Every company which had been declared as a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956

• The Name of Company Should ended with NIDHI LIMITED
• Only Individual can become as member in a NIDHI Company.
• Only Equity share can offer to its Members.
• Every NIDHI shall, within a period of one year from the commencement date should ensure that it has- not less than two hundred members and a Net Owned Funds of ten lakh rupees or more;
• It’s mandatory that a 10 % of the Total Outstanding Deposit should deposit in a Scheduled Commercial Bank or Post Office Savings as Unencumbered Deposit.

• Every Share Value not less than 10 rupees
• No Service Charges can levy on Share Issue process
• Every Member Should Purchase as minimum of 10 Rupees Share
• For Fixed Deposit One should take a minimum of 10 shares
• No Companies or Trust or Any institution can be a member of NIDHI
• No Minor can be a member in a NIDHI Company unless he didn’t have an Appointee
• One member can Vote according to the Number of Shares he hold but Limited to 5 % of total Vote

• A Nidhi cannot do business with an institution
• A Nidhi cannot do a CHITTY Business
• A Nidhi cannot do a leasing Business
• A Nidhi cannot do MICROFINANCE
• A Nidhi cannot do VEHICLE LOANs OR Higher Purchase Loans

A Nidhi can open Branches in its own districts if they earned profits after pay all taxes for three continuous years. With special permission from regional director a Nidhi Can Open Branches in any number and outside of district too.

NET OWNED FUND TO Deposit ratio would be 1:20

Fixed Deposit : • Minimum 6 months to maximum 60 Months Deposit Possible for Nidhi • The interest Offered to Fixed Deposit by a NIDHI Company would not exceed above the applicable interest offered by RBI to NBFCs

Recurring Deposit : • Minimum Period of Recurring Deposit should be 12 months • Maximum Period of Recurring Deposit Should Be 60 months • The interest Offered to recurring Deposit by a NIDHI company would not exceed above the Applicable interest offered by RBI to NBFCs

Savings Deposit : • A Minimum of 1 Lakh Rupees Can be Avail interest On Savings Deposit. • A NIDHI can offer 2% Additional interest on the existing nationalised bank’s offered SB Interest.

• There are certain regulations Applicable to withdraw A Deposit • A depositor cannot Withdraw a deposit from his Account with in First Three Months Time. • If one depositor Withdraw his deposit after Three Months but within 6 Months he is not qualified to collect his Interest for the locked period. • If A depositor Withdraw his deposits after 6 months But Before the maturity Period the Nidhi have right to Charge 2 % Lesser Interest on the promised Interest Offered.

A Maximum of 2 lakhs can give to A Member as Loan- If the Total Collected Deposits are 2 Crores.

Gold Loan : • A total of 80% On Market Gold rate can give as Gold Loan The Maximum Period of a Gold Loan Will Be 1 Year.

Gold & Silver Loan : • A total of 80% On Market Gold rate can give as Gold Loan The Maximum Period of A Gold Loan Will Be 1 Year.

Loan on Immovable Property : • A total of 50% On Market Gold rate can give as Gold Loan • The Maximum Period of a Gold Loan Will Be 7 Years (But Should Registered The Mortgage Loan)

Loan on Security : • Any FD certificates From Approved Banks • Government Securities • Insurance Policies

Locker facilities : • A NIDHI can Do Locker facility for its Members by applying Charges • The of Locker facility Services Should Not Exceed 20 % of total revenue earned.