What Is Nidhi Company?
A Nidhi Company is a non-banking financial company (NBFC) operating in India, governed by the Nidhi Rules, 2014, and recognised under Section 406 of the Companies Act, 2013. Functioning as a public limited company, its core objective revolves around promoting thrift and savings among its members while providing financial assistance to them through lending. To establish a Nidhi Company, a minimum of seven members are required, and the company must possess a net owned fund of at least ₹10 lakhs. Unlike other NBFCs, Nidhi Companies are limited in their operations, restricted to borrowing and lending activities among their individual members only. They cannot accept deposits from the general public or engage in other financial activities. Although exempted from RBI registration, Nidhi Companies must adhere to specific regulations provided by the Ministry of Corporate Affairs (MCA) in India.
Benefits of Nidhi Company?
Nidhi Companies, regulated under the Nidhi Rules of the Companies Act in India, offer a unique financial model focused on community savings and lending. One of the significant benefits is their ability to promote a culture of savings and thriftiness among members, especially in rural and semi-urban areas. Nidhi Companies primarily serve their members' financial needs, fostering a sense of financial inclusion and empowerment. These entities enjoy the benefit of exemption from the stringent Reserve Bank of India (RBI) regulations, making their operations relatively simpler and more accessible to small depositors. Additionally, they provide a secure and trustworthy platform for members to save and borrow, often at competitive interest rates. Nidhi Companies can mobilize funds effectively within their communities, facilitating loans for essential purposes like housing, education, and small businesses. Furthermore, they contribute to the socio-economic development of their regions by channeling local savings into productive investments. Overall, Nidhi Companies play a crucial role in promoting financial stability, inclusion, and community development in India.
Document Required
- Identity and Address Proof of Min 7 Memebr and 3 Director
- Aadhar card/ voter’s ID/ passport/ driving license
- Bank Statement & Electricity Bill / Phone Bill
- Passport-size photograph
- Blank document with specimen signature.
- Rental Agreement / NOC / Sale Deed
- Mobile No. & Email ID