Nidhi Company

The Nidhi Companies are legally recognized limited companies that accept deposits from and lend to their members. As a Nidhi Company is similar to an NBFC, its operations do come under the supervision of the Reserve Bank of India. However, the RBI has freed Nidhi Companies from the basic rules of the RBI and other regulations that apply to an NBFC because they Exclusively engage with shareholder-member money.
The first step in establishing a Nidhi Company in India is to incorporate a Limited Company under the 2013 Companies Act. A limited company must have a minimum of three directors and seven shareholders before it may be incorporated.
After the Limited Company is incorporated, the Nidhi Company must fulfill each of the following requirements within a year after the start date:
• Have Net Owned Funds (NOF) of ten lakh rupees or more;
• Have unencumbered term deposits of at least 10% of the outstanding deposits,
• Have a ratio of Net Owned Funds to Deposits of no more than one to twenty.