Acceptance of Deposit by Nidhi Company

Last Updated at: Dec 23, 2020
Latest Update

The Ministry of corporate affairs (MCA) has recently revised the compliance norms for Nidhi companies. The Ministry has also advised the investors to verify the status of a Nidhi company from the notification issued by the Centre in the official gazette before making any investment or deposit.

Acceptance of Deposit by Nidhi Company
  1. Maximum deposits in a Nidhi Company

  2. Net funds owned by a Nidhi Company

  3. What are the basic requirements of a Nidhi Company?

  4. How to go ahead with Nidhi Company registration?

  5. List of documents required for registering a Nidhi Company

  6. Limits on Loan

  7. Benefits of Nidhi Company registration

  8. FAQs

The acceptance of deposit is the sole reason for starting a Nidhi Company. There are certain rules related to Nidhi company, which it needs to follow, failing to do so can put the company under legal gauge. In this article, we are going to explore certain details about Nidhi Company, Nidhi Company rules related to the same, and what is the maximum and minimum limit of deposits in a Nidhi Company. 

Maximum Deposits in a Nidhi Company

One of the Nidhi Company rules is that a Nidhi Company will not accept any deposit, which is 20 times more than the net owned funds of the company as per the last audited financial statement of the Nidhi Company.  Based on this rule, here is the maximum deposit limit of a Nidhi Company:


Net Funds Owned by a Nidhi Company

Maximum Limit (in Rs.)
1 crore   20 crore
10 crore   200 crore
20 crore   400 crore
50 crore   1000 crore

What are the basic requirements of a Nidhi Company?

For a Nidhi Company registration, one needs to meet the basic requirements –

  • Minimum members- For a Nidhi Company, it is mandatory to have a minimum of 7 members. Of these 7 members, 3 members are directors of the company. 
  • Shareholder’s Funds- A minimum fund of Rs. 5 lakh is needed. 
  • Financing object- Nidhi Company receives deposits from its members and it also lends money to its members. Nidhi Company is formed for the mutual benefit of its members. 
  • Value of shares- The nominal value of equity shares cannot be less than Rs. 10 per share.
  • Minimum share to each shareholder- A minimum of 10 equity share or shares equivalent to Rs. 100.

nidhi company registration

How to go ahead with Nidhi Company registration

The following steps elucidate details about Nidhi Company registration

Step 1

You would need Digital Signature and Director Identification Number. This is the first thing that is needed when going ahead for Nidhi Company Registration. 

Step 2

Name approval is the next step. The name that you choose for Nidhi Company should be exclusive and should not match any of the registered companies. One can reserve the name using the Reserve Unique Name or RUN.

Step 3

Once you have got the name registered, you need to get all the required documents. For Nidhi Company registration, you need to have MoA, AoA, INC9, INC 10, DIR2. These documents have to be submitted to the ROC. In addition to these documents, the applicant also needs to submit the objective of incorporating the Nidhi Company. 

Step 4

Finally, the applicant needs to go for the incorporation of the company. You would need SPICE Form INC 32 for this. After completion of formalities, it will take 15-25 days for the formation of Nidhi Company. 

Step 5

After the registration of the Nidhi Company, you need to open a bank account; for this, you would need a certificate of incorporation, Memorandum of Association, Article of Association, and PAN card. 

List of documents required for registering a Nidhi Company

You would require the following documents for Nidhi Company Registration:

  1.   Pan Card of all the members of Nidhi Company
  2.   Photographs of the directors
  3.   Address proof of all the members of the company (directors)
  4.   Identity proof of the directors of the company
  5.   Directors Identification Number
  6.   Proof of registered office
  7.   In the case of rented space, one needs to present rent agreement
  8.   If you rented a property, then you would need the NOC certificate from the owner of the property
  9.   MoA or Memorandum of Association
  10.   AoA or Article of Association
  11.   MCA form Attestation 

Important Rules about to Deposits in a Nidhi Company

  • A Nidhi Company cannot accept a deposit, which is more than 20 times the funds of the company. The table for the same has been mentioned above.
  • The fixed deposits in Nidhi Company are of a minimum of 6 months and the maximum term can be 60 months. 
  • The recurring deposit in a Nidhi Company will be of a minimum of 12 months and a maximum of 60 months. 

Limits on Loan

If an individual wishes to take a loan from a Nidhi company, then there is a ceiling limit for the same. Here is the representation of the same: 

Amount of Deposit (in Rs.) Loan Limit 
2 crore Rs. 2 Lakhs
2 crore to 20 crore 7.50 lakhs
20 crore to 50 crore 12 lakhs
50 crore or more 15 lakhs

Interest on Loan

If one takes a loan from a Nidhi Company, then the interest that they need to pay is not more than Rs. 7.50 %. This interest is calculated on the reducing balance method. 

Benefits of Nidhi Company Registration

  • There are no external management involvement
  • Easy to get capital or borrowings
  • Easy to manage
  • Capital requirement is low
  • Compliances are not that stringent
  • Secured investment
  • Lower rate of interest
  • Lesser RBI intervention
  • Good for saving
  • Single regulatory body or the Nidhi Company Rules


1. What is a Nidhi Company?

It means a company that has been incorporated as a Nidhi to promote the habit of savings amongst its members. Nidhi Company is formed for the benefit of its members. It can only lend money to and from its members. 

2. Are there any penalties in case of non-compliance with Nidhi Company?

In case a Nidhi Company doesn’t adhere to the Nidhi Rules 2014 and Companies Act, 2013, then every officer of the company and the company itself will be a defaulter and have to bear a fine of Rs. 5000. In case the company or the office continues to break the rule, then a penalty of Rs. 500 per day is levied. 

3. After incorporation of the Nidhi company, what requirements does it need to meet?

A Nidhi Company needs to meet the following requirements:

  1.   It must have at least 200 shareholders
  2.   The net owned fund should be a minimum of Rs. 10 lakhs
  3.   Net Owned Fund: Term Deposit is in the ratio of 1: 20

Click here: how to register a company