Introduction Liquidity refers to a company’s ability to meet its short-term financial obligations, especially the ability to repay depositors and cover operational expenses. For Nidhi Companies, which rely entirely on the savings of their members to fund their lending...
Nidhi Company Articles
Explain the importance of financial literacy for Nidhi members.
Introduction Nidhi Companies are mutual benefit institutions registered under Section 406 of the Companies Act, 2013, and governed by the Nidhi Rules, 2014. They promote the habit of saving and provide loans exclusively to their members. Since the entire structure of...
Detail the criteria for member classification in a Nidhi Company.
Introduction Nidhi Companies function exclusively for the benefit of their members, accepting deposits and granting loans solely within this member group. Therefore, the classification and recognition of members is a crucial element in the management and regulation of...
Define the limitations of unsecured lending in a Nidhi Company.
Introduction Nidhi Companies are non-banking financial institutions registered under Section 406 of the Companies Act, 2013, and governed by the Nidhi Rules, 2014. Their primary objective is to promote thrift and provide credit among their members. Lending activities...
Describe the rules on dividend declaration in a Nidhi Company.
Introduction Nidhi Companies are mutual benefit organizations formed under Section 406 of the Companies Act, 2013, and governed by the Nidhi Rules, 2014. Their primary purpose is to cultivate savings among members and provide credit facilities exclusively to them....
Establish guidelines for internal financial control in Nidhi Firms.
Introduction Nidhi Firms, incorporated under Section 406 of the Companies Act, 2013 and governed by the Nidhi Rules, 2014, are community-based financial entities formed to promote thrift and provide credit among members. Since these companies operate primarily on the...
Introduction to risk management in Nidhi lending.
Introduction Nidhi Companies are member-driven financial institutions governed by Section 406 of the Companies Act, 2013, and the Nidhi Rules, 2014. Their primary function is to accept deposits and issue loans to members for their financial needs. While their...
Detail how a Nidhi Company maintains statutory registers.
Introduction A Nidhi Company, governed by Section 406 of the Companies Act, 2013 and the Nidhi Rules, 2014, operates as a mutual benefit institution where financial activities such as deposits and lending are carried out exclusively among members. To ensure...
Define the key accounting standards for Nidhi Companies.
Introduction Accounting standards are essential for maintaining consistency, reliability, and comparability in financial reporting. Nidhi Companies, though small in size compared to commercial banks or large NBFCs, operate under the regulatory framework of the...
Describe the financial reporting framework for a Nidhi Company.
Introduction Nidhi Companies, registered under Section 406 of the Companies Act, 2013 and governed by the Nidhi Rules, 2014, operate as mutual benefit financial institutions. They accept deposits and provide loans exclusively to their members. Given the nature of...