A nidhi company is a type of company in the Indian non-banking finance sector, recognized under section 406 of the Companies Act, 2013. Their core business is borrowing and lending money between their members.They are also known as Permanent Fund, Benefit Funds, Quasi Bank, Mutual Benefit Funds and Mutual Benefit Company.
They are regulated by Ministry of Corporate Affairs, which is also empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that these companies deal with their shareholder-members only.
Rate Of Interest On Deposits By Nidhi Company:
There are three types of Deposits accepted by Nidhi Companies and rate of interest on all deposits are mentioned below:
1. Fixed Deposit Interest Rate:
Rate of interest being offered by Nidhi company shall not exceed maximum rate of interest prescribed by the Reserve Bank of India which the NBFCs can pay on their public fixed deposits. As on date, the maximum rate of interest an NBFC can offer is 12.5% that has been prescribed by RBI and similarly, the interest rate that can be offered by Nidhi Companies on fixed Deposits cannot exceed 12.5% as well.
2. Recurring Deposit Interest Rate:
Recurring deposit rate of interest offered shall not exceed maximum rate of interest prescribed by the Reserve Bank of India which the NBFCs can pay on their public deposits which again is 12.5%.
3. Savings Deposit Account:
In case of savings deposits, the rate of interest being offered shall not exceed 2% above the rate payable by nationalized banks on savings account. Currently, the rate of interest offered by all nationalized banks ranges somewhere between 3-4% and accordingly, the Nidhi Company can offer interest rate up to 6%.
Check Here How Kovai Tech Nidhi Company is Giving High Rates Of Interest On Deposits as prescribed by the Reserve Bank of India, which the NBFCs can pay on their public deposits.
Check Nidhi Rules 2014 – Ratio of Net Owned Funds to Deposits.
Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit.
Nidhi companies existed even prior to the existence of companies Act 2013. The basic concept of nidhi is “Principle of Mutuality” These companies are more popular in South India, and 80% of Nidhi companies are located in Tamil Nadu.
Nidhi Company does not require a license from the Reserve Bank of India (RBI), making it simple to establish.
