The Member-Only Restriction
A Nidhi company can accept deposits and give loans only to its members. The restriction is foundational: a deposit from a non-member, or a loan to a non-member, is outside the Nidhi framework and is treated as a contravention of the Nidhi Rules, 2014. The company’s membership register is therefore the primary compliance document.
The Financial Ratios
The Nidhi Rules prescribe a net-owned-funds-to-deposit ratio not exceeding 1:20, and require the company to hold at least ten per cent of its deposits as unencumbered term deposits. These ratios are prudential limits. A Nidhi that breaches the ratio must restore compliance within the prescribed period and report the breach.
The Prohibited Activities
A Nidhi cannot: accept deposits from or lend to any person other than a member; take deposits from or lend to any body corporate; pay brokerage or incentive for mobilising deposits or for granting loans; or raise loans from persons other than members. These prohibitions are specific and are tested in MCA inspections.
The Deposit Insurance Gap
Deposits accepted by Nidhi companies are not insured by the DICGC. The absence of insurance is a member-protection gap that the MCA has highlighted in public advisories. A Nidhi that markets its deposits as “safe” without disclosing the insurance gap may face a misrepresentation finding.
Documentation
The file should contain: the membership register; the deposit and loan registers; the net-owned-funds computation; the ratio working; the unencumbered deposit confirmation; the board resolution approving each deposit and loan; and the annual Nidhi return. A Nidhi that cannot produce the member-wise registers has an incomplete compliance record.
Call to Action: For Nidhi compliance review, ratio computation, or MCA inspection readiness, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.