Nidhi Companies

Why in News?

• Recently, The Central Government has amended the provisions related to Nidhi companies under the Companies Act, 2013 and the Rules.
• This will accomplish the objectives of transparency & investor friendliness in the corporate environment of the country.

About Nidhi Companies

• Under Nidhi Rules, 2014, Nidhi is a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.
• It is a company registered under the Companies Act, 2013.
• It works on the principle of mutual benefits that are regulated by the Ministry of Corporate Affairs.
• Nidhi Company is a class of Non-Banking Financial Company (NBFC) and Reserve Bank of India (RBI) has powers to issue directives for them related to their deposit acceptance activities.
• However, since these Nidhis deal with their shareholder-members only, RBI has exempted them from the core provisions of the RBI Act and other directions applicable to NBFCs.

Prelims Question

Q.Consider the following statements regarding Nidhi Companies:
1.It is a company registered under the Companies Act, 2013.
2.Reserve Bank of India (RBI) has powers to issue directives for them related to their deposit acceptance activities.
Which of the statements given above is/are correct?
a)1 only
b)2 only
c)Both 1 and 2
d)Neither 1 nor 2

Answer to the Prelims Question