1. Restriction to Member-Only Deposits

• A Nidhi Company is not allowed to accept deposits from the general public.
  
• It can accept deposits only from its registered members.
  
• This restriction ensures a closed-loop financial system among members.
  
• Accepting public deposits would violate Rule 6 of the Nidhi Rules, 2014.
  
• The mutual benefit character of the company must be preserved.
  

2. Definition and Scope of Permitted Deposits

• Permissible deposit types include savings, fixed, and recurring deposits.
  
• These deposits can be accepted only from individuals who hold membership in the company.
  
• Members must subscribe to a minimum number of equity shares to qualify.
  
• The terms and limits for deposit acceptance are defined under the Nidhi Rules.
  
• No deposit scheme can be offered to outsiders or non-members.
  

3. Legal Framework Governing Deposits

• Section 406 of the Companies Act, 2013, governs the formation and operation of Nidhi Companies.
  
• Rule 11 of the Nidhi Rules, 201,4 lays down specific provisions related to deposit schemes.
  
• Deposits must not exceed 20 times the Net Owned Funds of the company.
  
• At least 10% of total deposits must be kept as unencumbered term deposits in a scheduled bank.
  
• Any deviation from these rules is considered non-compliance.
  

4. Consequences of Accepting Public Deposits

• Accepting deposits from the public is a violation of statutory rules.
  
• The company may lose its Nidhi status and face legal action from the MCA.
  
• Directors may be penalized and held personally liable for violations.
  
• The company may be subjected to audits, inspections, or deregistration.
  
• Non-compliance affects the company’s credibility and legal standing.
  

5. Measures to Ensure Compliance

• The company must maintain a verified register of members with deposit details.
  
• Regular filings such as NDH-1 and NDH-3 must reflect member-only deposits.
  
• The company should have clear internal policies restricting deposits to members.
  
• Compliance training should be conducted for directors and officers.
  

• Any offer or scheme targeting non-members should be immediately withdrawn.