Nidhi Company Business Plan PDF

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Nidhi Company Business Plan


They are mutual benefit societies because their dealings are restricted only to the members, and membership is limited to individuals The principal source of funds is the contribution from the members.

The loans are given to the members at relatively reasonable rates The deposits mobilized by Nidhi’s are not much when compared to the organized banking sector.

RBI is empowered to issue directions to them in matters relating to their deposit acceptance

However, in recognition of the fact that these Nidhi’s deal with their shareholder-members only, RBI has exempted the notified Nidhi’s from the core provisions of the RBI Act.

• Business as chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate.

• Issue preference shares, debentures or any other debt instrument by any name or in any form

• Open any current account with its members.

• Acquire another company by purchase of securities or control the composition of the Board of
Directors UNLESS Special resolution and Regional Director approval is obtained.

• May provide locker facilities on rent to its members‐rental income from such facilities not
exceeding 20% of the gross income of the Nidhi at any point time during a financial year.

• Carry on any business other than the business of borrowing or lending in its own name.


• A Nidhi shall not accept deposits exceeding 20 times its Net Owned Assets as per last audited financial statements.

• Fixed deposits ‐ minimum period of 6 months & maximum period of 60 months AND Recurring deposits – minimum period of 12 months & maximum period of 60 months.

• In case of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such conditions and time limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10%.

• Recurring deposits relating to mortgage loans ‐ the maximum period of recurring deposits shall correspond to the repayment period of such loans granted by Nidhi.

• Invest and maintain ‐ unencumbered term deposits ‐ scheduled commercial bank or post office deposits in its own name ‐ not be less than 10% of the deposits outstanding at the close of the business on the last working day of the second preceding month.

• Maximum balance in a savings deposit account ‐ shall not exceed Rs.1,00,000/‐ and interest shall not exceed 2% above the rate of interest payable to the savings bank account by nationalized banks.

The interest rate on deposits:

• Rate of interest ‐ The rate of interest to be charged on any loan given by a Nidhi shall not exceed 7.5% above the highest rate of interest offered on deposits by a Nidhi.

• Nidhi shall charge the same rate of interest on the borrowers in respect of the same class of loans.

• Rates of interest of all classes of loans shall be prominently displayed on the notice board at the registered office and each branch office of Nidhi.


• A Nidhi shall not declare a dividend exceeding 25% or such higher amount as may be specifically approved by the Regional Director for reasons to be recorded in writing and further subject to the following cumulative conditions.

• An equal amount is transferred to General Reserve;

• There has been no default in repayment of matured deposits and interest; and

• It has complied with all the rules as applicable to Nidhi Company


• The Director shall be a Member of Nidhi.

• He shall hold office for a term of up to 10 consecutive years on the Board.

• He shall be eligible for re‐appointment only after the expiration of 2 years of ceasing to be a director.

• Where the tenure of any director, in any case, had already been extended by the Central Government it shall terminate on expiry of such extended tenure.

• The person to be appointed as a Director shall have a valid Director Identification Number (DIN) and shall not have been disqualified as provided in Section 164 of the Companies Act, 2013.



• Nidhi Company shall file a return of statutory compliances [Pursuant to sub rule (2) of rule 5 of Nidhi Rules, 2014] Within 90 days from the closure of the financial year in Form NDH.

This form contains all the details regarding the members, loans, deposits, reserves etc for the full financial year which shall be duly certified by a practicing professional.

Language English
No. of Pages24
PDF Size10 MB

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