Encouraging Thrift and Savings.
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Welcome to Trisuka, your trusted partner in the formation of NIDHI Companies. We will provide you with valuable insights into the formation of a NIDHI Company. Discover what a NIDHI Company entails, the necessary documents required, the step-by-step process, eligibility criteria, and the pros and cons of choosing this unique type of company.


NIDHI Company Registration

A NIDHI Company is a non-banking financial institution recognized under the Companies Act, 2013. The primary objective of a NIDHI Company is to cultivate the habit of thrift and savings among its members. It operates as a mutual benefit society, accepting deposits from and providing loans to its members only. NIDHI Companies are regulated by the Ministry of Corporate Affairs and play a crucial role in promoting financial inclusion at the grassroots level.

To establish a NIDHI Company, certain documents need to be prepared and submitted. These include:

  • Memorandum of Association (MOA): The MOA should clearly outline the objectives, rules, and regulations of the NIDHI Company. It should specify the minimum number of members required to start the company.
  • Articles of Association (AOA): The AOA should detail the internal rules and regulations governing the operations and management of the NIDHI Company.
  • Director Identification Number (DIN): All proposed directors of the NIDHI Company must obtain a unique DIN from the Ministry of Corporate Affairs (MCA).
  • Digital Signature Certificate (DSC): Digital signatures are required for electronically signing various documents throughout the registration process.
  • Address Proof: The NIDHI Company must provide address proof documents such as utility bills or rental agreements for the registered office address.

The process of forming a NIDHI Company involves the following steps:

  • Minimum Members: Ensure the presence of at least seven members to form a NIDHI Company. All members must be individuals and Indian citizens.
  • Name Approval: Select a unique name for the NIDHI Company and apply for its approval with the Registrar of Companies (ROC). The name should include the term “NIDHI” as a part of the company name.
  • Incorporation Documents: Prepare the necessary incorporation documents, including the MOA, AOA, and other prescribed forms, as per the requirements of the Companies Act, 2013.
  • Filing with ROC: Submit the incorporation documents to the ROC along with the requisite fees.
  • Capital Requirement: Ensure that the NIDHI Company has a minimum paid-up equity share capital of Rs. 5 lakhs within one year of its incorporation.
  • Compliance: Comply with post-incorporation requirements, such as holding regular board meetings, maintaining proper accounting records, and adhering to tax and regulatory obligations.

To register a NIDHI Company, the following eligibility criteria must be met:

  • The NIDHI Company must have at least seven individual members, all of whom are Indian citizens.
  • The company must be formed with the objective of cultivating thrift, savings, and mutual benefit among its members.
  • Promotes Thrift and Savings: NIDHI Companies encourage members to develop the habit of thrift and savings, fostering financial discipline and stability.
  • Financial Inclusion: NIDHI Companies play a vital role in promoting financial inclusion by providing financial services to members, especially in rural and underserved areas.
  • Member-Focused Approach: As a mutual benefit society, NIDHI Companies focus on the needs and interests of their members, providing customized financial products and services that cater to their specific requirements.
  • Limited Liability: Members of a NIDHI Company have limited liability, protecting their personal assets and minimizing risk.
  • Simple Registration Process: The process of registering a NIDHI Company is relatively straightforward and cost-effective compared to other financial institutions.
  • Restricted Operations: NIDHI Companies are restricted in their operations and can only accept deposits and provide loans to their members. They are not allowed to engage in any other financial activities such as offering credit cards or engaging in investment banking.
  • Limited Capital Mobilization: NIDHI Companies rely primarily on member deposits for their capital base. They may face challenges in mobilizing sufficient capital to meet the financial needs of their members.
  • Regulatory Compliance: NIDHI Companies are subject to regulatory oversight and compliance requirements imposed by the Ministry of Corporate Affairs. They must adhere to specific rules and regulations to ensure the protection of member interests.
  • Limited Access to Funding: NIDHI Companies have limited options for raising external funds as they cannot issue shares to the general public or attract external investors. This may restrict their ability to expand operations or offer a wider range of financial products and services.
  • Member Dependency: NIDHI Companies depend heavily on their members for growth and sustainability. Success is linked to the active participation and engagement of members, making member engagement and retention crucial for long-term viability.


  1. Can a NIDHI Company accept deposits from the general public?
    No, NIDHI Companies can only accept deposits from their members. Accepting deposits from the general public is strictly prohibited.

  2. Is there a limit on the interest rates charged by NIDHI Companies?
    Yes, NIDHI Companies must comply with the interest rate limits prescribed by the Reserve Bank of India (RBI). They cannot charge excessive interest rates on loans provided to their members.

  3. Can a NIDHI Company convert into a different type of financial institution?
    No, NIDHI Companies are not permitted to convert into different types of financial institutions. They are specifically designed to operate as mutual benefit societies with the objective of promoting thrift and savings.

  4. Can a NIDHI Company have branches in multiple locations?
    Yes, NIDHI Companies can have branches in multiple locations, subject to compliance with regulatory requirements and obtaining the necessary approvals.

  5. Are NIDHI Companies eligible for any tax benefits?
    NIDHI Companies do not enjoy any specific tax benefits or exemptions. They are subject to regular tax provisions applicable to companies, including income tax and other applicable taxes.

**Please note that while these answers provide a general understanding, it is always advisable to consult with professionals or legal experts for specific guidance to your unique circumstances.