Nidhi Company registration — mutual savings, done formally.

What is a Nidhi Company?

A Nidhi Company is a type of non-banking financial company recognised under Section 406 of the Companies Act, 2013, whose sole business is borrowing and lending money strictly among its own members. It exists to cultivate the habit of thrift and savings within a closed community — a family network, a professional group, a local association — through a formal, company-registered structure.

Because a Nidhi Company deals only with its own members and not the general public, it's exempted from holding a separate RBI licence the way a typical NBFC must, provided it complies with the Nidhi Rules, 2014. That makes it one of the simplest ways to formalise a community lending circle while giving members real legal protection.

Who a Nidhi Company is right for

• Community or professional groups that want a formal, legally protected way to pool savings and lend to each other.
• Founders looking for a low-regulatory-overhead alternative to an NBFC, since Nidhi Companies are exempt from the core RBI licensing an NBFC needs.
• Groups with a genuine base of 200+ potential members — the Nidhi Rules require this within a year, so it isn't a fit for very small circles.

It's not the right structure if you want to lend to or accept deposits from the general public, or if you're building a fintech-style lending product — those routes require an NBFC licence or other RBI authorisation, which a Nidhi Company cannot substitute for.

What you need to register

• Minimum 7 members and 3 directors to incorporate (the directors can be among the 7 members).
• Incorporated as a public company with "Nidhi Limited" in its name, via SPICe+.
• Minimum 200 members within one year of incorporation — a hard requirement under the Nidhi Rules, 2014.
• Net Owned Funds of at least ₹10 lakh within one year, and a Net Owned Funds-to-deposits ratio not exceeding 1:20.
• Unencumbered term deposits of at least 10% of outstanding deposits, maintained on an ongoing basis.

The registration process

1. DSC & DIN

Digital signatures and Director Identification Numbers for the founding directors.

2. Name approval

We reserve a name ending in "Nidhi Limited" via the MCA's RUN/SPICe+ service.

3. Incorporation as a public company

SPICe+ is filed with a MoA and AoA restricting activity to member-only deposits and loans, incorporating you initially as a public limited company.

4. Grow to 200 members & file NDH-4

Within 120 days of the deadline for meeting the membership, Net Owned Funds and deposit-ratio thresholds, you file Form NDH-4 to formally declare Nidhi status with the Registrar.

Documents you'll need

• PAN & Aadhaar of all proposed directors and founding members.
• Passport-size photographs of each director.
• Address proof — a recent bank statement or utility bill for each director.
• Registered-office proof plus a No Objection Certificate (NOC) from the property owner.
• Proposed name options ending in "Nidhi Limited".
• A note on planned membership growth toward the 200-member threshold.

Nidhi Company vs the alternatives

Ongoing compliance

A Nidhi Company carries a distinct compliance calendar alongside standard company filings: a half-yearly return (Form NDH-3), an annual return (Form NDH-1), and ongoing monitoring of the Net Owned Funds-to-deposits ratio and the unencumbered term-deposit requirement. Annual ROC filings, board meetings and a statutory audit apply as with any company. We handle the full calendar — see our compliance service, or get an itemised quote on our pricing page.

Frequently asked questions