Nidhi Company Highlights
Q. Which of the following is/are true regarding Nidhi Companies?
1) Most of the Nidhi companies are located in South India.
2) No RBI approval is necessary to register the Nidhi Company.- Published on 21 Dec 16a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
ANSWER: Only 2
Nidhi Companies were existed even prior to the existence of companies Act 1913. The basic concept of Nidhi is "Principle of Mutuality" ("Paraspara Sahayata").
Thus Nidhis function for the common benefit advantage of all their Members/Shareholders. These companies are more popular in South India and 80% of Nidhi companies are located in Tamil Nadu.
Nidhi Company is governed by Nidhi Rules, 2014.
Nidhi companies are incorporated in the nature of Limited company and hence, they have to comply with two set of norms, one of Public limited company as per Companies Act, 2013 and another is for Nidhi Rules, 2014.
No RBI approval is necessary to register the Nidhi Company. RBI has specifically exempted this category of NBFC in India to comply with its core provisions such as registration with RBI, etc.
