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Govt urges investors to check antecedents of Nidhi companies

Nidhi companies are non-banking finance entities that are into lending and borrowing with their members
Representational image.
Representational image.
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PTI   |   New Delhi   |   Published 25.08.21, 01:57 AM

The government on Tuesday again urged investors to check the antecedents of Nidhi companies before putting in their money, as at least 348 entities have failed to meet the criteria to be declared as Nidhi companies.

This is the second time in six months that the corporate affairs ministry has come out with an advisory as there are a large number of companies, which, though functioning as Nidhi companies, have not applied for such a status under the relevant rules. 

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Nidhi companies are non-banking finance entities that are into lending and borrowing with their members. 

Under Section 406 of the Companies Act, 2013, and amended Nidhi Rules, companies incorporated as Nidhi need to apply to the ministry in form ‘NDH-4’ for declaration as Nidhi entities.



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