OPERATIONS OF NIDHI COMPANY | NIDHI COMPANY REGISTRATION FEES
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 OERATIONS OF A NIDHI COMPANY ARE:-
1.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. 2.PROVIDING OF LOAN: Whom can a Nidhi Company provide loans?Only to its members Limits on Nidhi Company to provide Loan: Conditions for providing loan: Rate of Interest on 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.