Introduction Beyond verifying financial statements, the auditor of a Nidhi Company has a special responsibility under Rule 22 of the Nidhi Rules, 2014. Each year, the auditor must certify whether the company has complied with all provisions of the Nidhi Rules. This certificate acts as an additional safeguard for depositors and regulators. Annual Certification by […]

Introduction Auditors play a vital role in maintaining the transparency and credibility of a Nidhi Company. Since Nidhis deal with public deposits, their financial records must be independently verified by qualified professionals. To prevent over-familiarity and ensure objectivity, Rule 19 of the Nidhi Rules, 2014 imposes clear restrictions on the tenure of auditors, whether individuals

Introduction The business model of a Nidhi Company is based on collecting deposits from members and lending those funds back to members on a mutual benefit basis. Since interest is the main source of income, the law regulates how much interest a Nidhi can charge. Rule 16 of the Nidhi Rules, 2014 provides the framework

Introduction Nidhi Companies lend only to their members and always against security, such as gold, property, fixed deposits, or government instruments. A common question is whether the Nidhi can sell or use this collateral if the member refuses to repay the loan. The Legal Position Yes, a Nidhi Company can sell or realise the collateral,

Introduction Nidhi Companies were created with the core objective of encouraging savings and providing financial assistance to their members. One of the most common queries among both promoters and members is: What types of loans can a Nidhi Company give, and what are the limits? Rule 15 of the Nidhi Rules, 2014, as amended, provides

Introduction Deposits form the backbone of a Nidhi Company’s operations. Since Nidhis are formed with the objective of promoting savings among their members and providing loans within that circle, deposits represent both the trust of members and the financial foundation of the institution. Because deposits involve public money, the Ministry of Corporate Affairs (MCA) has

Opening and Closing of Branches in Nidhi Companies – Rule 10 Explained Introduction Nidhi Companies are mutual benefit societies recognised under Section 406 of the Companies Act, 2013. Since they operate with public deposits, the law regulates not only how they raise and use funds but also where and how they expand operations. Rule 10

Introduction Since Nidhi Companies are mutual benefit societies, their membership rules are strictly defined. Rule 8 of the Nidhi Rules, 2014 explains who can become a member, restrictions on membership, and the rights of members while holding deposits or loans. Who Can Be a Member? A Nidhi can only admit individuals as members. This means