Nidhi Company: Everything You Need To Know About It

Starting a Nidhi business requires certain fundamental principles. A business owner can choose to open a Nidhi firm based on the potential benefits. When starting a Nidhi business, there are some restrictions and deposit conditions. Nidhi company incorporation is the first. When you are new to the business, it is important to understand the meaning of Nidhi-company.


  1. Nidhi Company is usually incorporated as a Public Limited Company.
  2. Nidhi Company’s main goal is to encourage the habit of saving and caution among its members. It will also receive deposits from its members and lend money to them only for mutual benefit.
  3. Nidhi Company must have at least 200 members within the first year of its existence.
  4. In addition, the Net Owned funds should not exceed Rs.10 lakhs within one year. You should not have a ratio of Net Owned Funds to deposits that exceeds 1:20.

Restrictions Nidhi Company

An Nidhi Company is not allowed to engage in any of the following activities:

  • To engage in the business of hiring purchase, chit funds, leasing finance, acquisitions of securities, or insurance.
  • You can also issue preference debentures and shares.
  • To open the company account.
  • It is not allowed to lend, accept, or deposit money to anyone other than its members.
  • To publish any type of advertisement.
  • To enter into any type of agreement or to pay brokerage to request any type of deposits.
  • As security, pledge any assets that have been submitted by company members.

Conditions for Deposit

These are the conditions that every Nidhi Company must comply with before it grants loans:

  • The Nidhi Company will not accept deposits that exceed 20% of its net-owned funds.
  • A fixed deposit amount is accepted for at least six months, maximum sixty months. Periodic deposits are accepted for up to 12 months, maximum 60 months.
  • The Nationalized Bank rate should not be higher than 2% on deposits.


  • Only Nidhi Company branches may be opened if it has made a continuous net profit after taxes during the three previous years.
  • After three years have passed, the Nidhi Company may open up to three more branches in the district.
  • Only Nidhi Company may open branches if it has filed a financial statement along with its annual return to the Registrar.


The following restrictions are applied to loans that have been granted:

  • Loan amount 2 lakhs – If the deposit is two crores.
  • A loan amount of 7.50 lakhs – If the deposit is more than two crores but less than 20 crores.
  • A loan amount of 12 Lakhs – If the deposit is more than 20 crores but less than 50 crores.
  • Loan amount 15 lakhs – If the deposit is more than 50 crores.

Learn more Register Nidhi companies India’s requirements, procedures, and other details

Nidhi Company: Everything You Need To Know About It
Nidhi Company: Everything You Need To Know About It

This article discusses how to open a Nidhi business so you can save money for the future. Young entrepreneurs will find the details on how to incorporate a Nidhi business useful. Learn all about the advantages of starting a Nidhi business so you can reap all the benefits.

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