It is a company classified as an NBFC (a Non-banking financing company) and registered under Section 406 of Companies Act, 2013. The main business of such a company is to facilitate lending money between the core members of the company. This way members (or shareholders) are encouraged to save money and invest it within the company. This saving is then used by the company for its members (or shareholders), to provide them loans or advances, and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings.

How can I expand the operations of my Nidhi Company to different areas?
We can open a minimum of three branches in a particular district. In case if you want to open more branches in the district or outside area, you have to intimate the Registrar of the companies 30 days prior to their opening.

Should I dissolve my Nidhi Company because it has not gained the necessary numbers of representatives in spite of completing one full year of tenure?
The conditions laid down by the Act says that a Nidhi Company should acquire a minimum of 200 members within its first year of incorporation. However, in case the company is not able to fulfill the required condition, it can apply for an extension with the necessary government authorities.

In a Nidhi Company, are members allowed to credit or debit cash to the general fund?
No, members are only allowed to deposit, borrow, or lend funds.

What are the criteria to become a representative of a Nidhi Company?
Any person can deposit, lend or borrow money as the said provisions provided by the Companies Act, 2013. Hence, they can all becomes member of a Nidhi Company provided they are not a corporation or a company.

In a Nidhi Company, what should the limit for cash deposit be, for its representatives?
As per the last audited statements, a Nidhi Company can accept deposits not exceeding 20 times of its net owned assets.