A Nidhi Company is a type of Non-Banking Financial Company (NBFC) recognised under Section 406 of the Companies Act 2013. Its core purpose is to cultivate thrift and savings habits among its members, and to accept deposits from and lend to its members only.
Nidhi Companies are primarily regulated by the MCA (not the RBI, unlike other NBFCs) and are popular in South India as a vehicle for community-based savings and lending. SPOTON provides complete Nidhi Company registration and ongoing RBI/MCA compliance support.
Key Benefits
Community SavingsEncourages the habit of savings and provides credit facilities to members.
Limited LiabilityDirectors and members enjoy limited liability protection.
Simpler than NBFCNot directly regulated by RBI — fewer licences required compared to full NBFCs.
Member-CentricOperations limited to members — reduced risk and close-knit governance.
Attractive ReturnsMembers can earn better deposit interest rates than commercial banks.
Eligibility & Requirements
Minimum 7 shareholders at incorporation
Minimum 3 directors
Minimum 200 members within 1 year of incorporation
Net Owned Funds of at least ₹10 lakh
Unencumbered term deposits ≥ 10% of outstanding deposits
NDH-4 filing within 60 days of completing 1 year
Step-by-Step Process
1
Incorporate as Public Ltd
Nidhi must first be incorporated as a Public Limited Company with 'Nidhi Limited' as suffix.
2
Achieve 200 Members
Build membership to 200+ within 12 months of incorporation.
3
Net Owned Funds
Ensure NOF reaches ₹10 lakh or more.
4
File NDH-4
Apply for Nidhi Company status with MCA using Form NDH-4.
5
MCA Approval
Receive declaration of Nidhi Company status from MCA.
6
Ongoing Compliance
File NDH-1, NDH-2, NDH-3 quarterly/annually as required.
Documents Required
PAN and address proof of all 3 directors
Photographs of directors
Registered office address proof + NOC
Memorandum and Articles of Association (with Nidhi objects)
Initial member list (minimum 7)
Capital contribution details
Need help gathering documents? Our team will send you a personalised checklist and guide you through document preparation — just WhatsApp or call us.
Frequently Asked Questions
No. A Nidhi Company can only accept deposits from its registered members and lend only to its members. It cannot carry on any business other than borrowing and lending among members.
Nidhi Companies are exempted from most RBI NBFC regulations. However, they must comply with the Nidhi Rules 2014 and file regular returns with the MCA.
A Nidhi Company must have Net Owned Funds (NOF) of at least ₹10 lakh and maintain this throughout its operation.
First, incorporation as a Public Ltd company takes 15–25 days. Achieving Nidhi status via NDH-4 approval from MCA takes a further 30–60 days after the company meets membership and NOF requirements.
