A Nidhi Company is a type of non-banking financial institution in India that primarily deals with accepting deposits and providing loans to its members. Here are the key details and considerations related to Nidhi Companies’ banking activities:

1. Bank Account:

• A Nidhi Company is required to open and maintain a bank account in its name.

2. Authorized Capital:

• The authorized capital of the Nidhi Company determines the amount up to which the company can issue shares. The company is required to deposit a minimum amount in the bank based on its authorized capital.

3. Minimum Capital Requirement:

• According to the Nidhi Rules, 2014, a Nidhi Company must have a minimum net-owned fund (NOF) of Rs. 10 lakhs or more. The NOF is calculated as the aggregate of paid-up equity share capital and free reserves.

4. Deposit Acceptance:

• Nidhi Companies are allowed to accept deposits from their members. However, there are certain restrictions and regulations imposed by the Reserve Bank of India (RBI) and the Ministry of Corporate Affairs (MCA) regarding the acceptance of deposits.

5. Loans to Members:

• Nidhi Companies can provide loans to their members for purposes specified in their objectives. However, the amount of loan granted and the terms and conditions are subject to regulatory restrictions.

6. Interest Rates:

• The interest rates applicable to deposits and loans are regulated by the Nidhi Rules and guidelines issued by the RBI. Nidhi Companies must adhere to these regulations.

7. Depository and Prudential Norms:

• Nidhi Companies must comply with depository norms and prudential norms set by the RBI to ensure the safety of deposits and the financial stability of the company.

8. Annual Compliances:

• Nidhi Companies are required to comply with annual filing requirements, including filing of financial statements, annual returns, and other statutory reports with the Ministry of Corporate Affairs.

9. Auditing:

• Nidhi Companies must undergo regular auditing by a statutory auditor. The audit reports are filed with the MCA, providing a comprehensive view of the company’s financial health.

Important Notes:

• Regulatory Compliance: Nidhi Companies must comply with the Nidhi Rules, 2014, issued by the MCA, and any additional guidelines or circulars issued by the RBI.

• Bank Selection: The choice of the bank for maintaining the Nidhi Company’s accounts should be made in compliance with regulatory requirements and based on factors such as the bank’s reputation, services, and convenience.

• Professional Assistance: Seeking professional assistance from legal and financial experts can ensure that the Nidhi Company operates within the regulatory framework and complies with all applicable laws.

It’s crucial for Nidhi Companies to stay updated on regulatory changes and maintain transparency and compliance in their financial operations to build trust among members and stakeholders.