Nidhi Company is a company registered under the Companies Act, 2013, which has a sole objective of cultivating the habit of thrift and savings amongst its members. Nidhi companies are allowed to take a deposit from its members and lend to its members only. Therefore, the funds contributed for a Nidhi company are only from its members (shareholders) and used only by the shareholders of the Nidhi Company.
Nidhi Company is a class of NBFCs and RBI is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that these Nidhi’s deal with their shareholder-members only, RBI has exempted the notified Nidhi’s from the core provisions of the RBI Act and other directions applicable to NBFCs. Therefore, Nidhi Company is an ideal entity to take a deposit from and lend to a specific group of people.
The Operations of a Nidhi Company are:-
ACCEPTANCE OF DEPOSIT:
From whom a Nidhi Company can accept Deposits?
- Only from its Members
Types of Deposits that can be accepted by a Nidhi Company:
Conditions for the closure of account by Fixed or Recurring Deposit holder:
- A Nidhi Company shall not repay any deposit within a period of three months from the date of its acceptance
- Where at the request of the depositor, a Nidhi Company repays any deposit after a period of three months, the depositor shall not be entitled to any interest up to six months from the date of deposit;
- Where at the request of the depositor, the company makes repayment of a deposit before the expiry of the period for which such deposit was accepted by the company, the rate of interest payable on such deposit shall be reduced by two percent from the rate which the company would have ordinarily paid, had the deposit been accepted for the period for which such deposit had run:
Provided that in the event of death of a depositor, the deposit may be repaid prematurely to the surviving depositor or depositors in the case of joint holding with survivor clause, or to the nominee or to legal heir with interest up to the date of repayment at the rate which the company would have ordinarily paid, had such deposit been accepted for the period for which such deposit had run.
PROVIDING OF LOAN:
- shall not exceed seven and a half percent above the highest rate of interest offered on deposits by Nidhi Company
- shall be calculated on reducing balance method
- shall charge the same rate of interest on the borrowers in respect of the same class of loans
- the rates of interest of all classes of loans shall be prominently displayed on the notice board at the registered office and each branch office of Nidhi Company
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|Sr. No.||Type of Deposits||Minimum Period||Maximum Period||Rate of Interest|
|1||Fixed deposit||6 Months||60 Months||not exceeding the maximum rate of interest prescribed by the Reserve Bank of India which the Non-Banking Financial Companies can pay on their public deposits.|
|2||Recurring deposit||12 Months||60 Months||Same as above|
|3||Recurring deposit relating to mortgage loans||–||Repayment period of such loans granted by Nidhi Company||Same as above|
|Sr. No.||Type of Account||Maximum Balance||Rate of Interest|
|1||Saving Deposit Account||Rupees 1 Lakh||not exceeding two per cent above the rate of interest payable on savings bank account by nationalized banks|
|Column A||Column B||Column C|
|Sr. No.||Total amount of Deposit as per the last audited annual financial statements||Limit per member up to which a Nidhi Company can provide Loan||In case, Nidhi Company has not made profits continuously in the three preceding financial years, Limits revised to|
|1||Less than Rs. 2 Crore||Rs. 2 Lakh||does not make any fresh loans exceeding 50% of the amount specified in Column B|
|Less than Rs. 20 Crore||Rs. 7.5 Lakh||does not make any fresh loans exceeding 50% of the amount specified in Column B|
|Less than Rs. 50 Crore||Rs. 12 Lakh||does not make any fresh loans exceeding 50% of the amount specified in Column B|
|More than Rs. 50 Crore||Rs. 15 Lakh||does not make any fresh loans exceeding 50% of the amount specified in Column B|
|Column A||Column B|
|Securities against which a Nidhi Company can provide Loan||Other Conditions as applicable|
|Gold, silver, and jewelry||Repayment period of such loan shall not exceed one year|
|Immovable property||1. Total loans against immovable property (excluding mortgage loans granted on the security of property by registered mortgage) not exceed fifty percent of the overall loan outstanding on the date of approval by the board 2. Individual loan shall not exceed fifty percent of the value of property offered as security 3. Period of repayment of such loan shall not exceed seven years|
|1. Fixed deposit receipts, 2. National Savings Certificates, 3. Other Government Securities and 4. Insurance policies||1. Such securities duly discharged shall be pledged with Nidhi Company 2. Maturity date of such securities shall not fall beyond the loan period or one year whichever is earlier 3. In the case of loan against fixed deposits, the period of loan shall not exceed the unexpired period of the fixed deposits|