The Ministry of Corporate Affairs (MCA) has amended rules governing Nidhi companies, whereby its prior declaration will be mandatory for certain entities before they start accepting deposits.



  • Now, public companies desiring to function as Nidhis must obtain prior declaration from the central government before accepting deposits.
  • For timely disposal, it has also been provided in amended rules that in case no decision is conveyed by the central government within 45 days of the receipt of applications by companies in NDH-4 form, approval will be deemed as granted. This will apply for such companies which shall be incorporated after Nidhi (Amendment) Rules, 2022.


About NIDHI Companies

  • Nidhi in the Indian context means ‘treasure’. However, in the Indian financial sector it refers to any mutual benefit society notified by the Central / Union Government as a Nidhi Company.
  • The companies doing Nidhi business, viz., borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.
  • They are mutual benefit societies, because their dealings are restricted only to the members; and membership is limited to individuals.
  • Nidhis are companies registered under the Companies Act, 1956 and are regulated by the Ministry of Corporate Affairs (MCA). Even though Nidhis are regulated by the provisions of the Companies Act, 1956, they are exempted from certain provisions of the Act, as applicable to other companies, due to limiting their operations within members.
  • Since Nidhis come under one class of NBFCs, RBI is empowered to issue directions to them in matters relating to their deposit acceptance activities.