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Govt cautions public as 348 firms fail to meet norms as 'Nidhi' cos
TIWN
Govt cautions public as 348 firms fail to meet norms as 'Nidhi' cos
PHOTO : TIWN

New Delhi, Aug 24 (TIWN) The Ministry of Corporate Affairs has cautioned the public and stakeholders of 'Nidhi' businesses as none of the the companies scrutinised by the government so far have been able to satisfy the requisite criteria for being declared a Nidhi company.

The business of Nidhi companies involves borrowing from members and lending to members only.

They are a class of non-banking financial companies (NBFC) and are generally known by several names including Nidhi, permanent fund, benefit funds, mutual benefit funds, and mutual benefit company. 

Under section 406 of the Companies Act, 2013, and Nidhi Rules, 2014 (as amended), companies incorporated as Nidhi companies need to apply to the Central government in form NDH-4 for declaration as a Nidhi company.

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