1. General Limit on Branches

• A Nidhi Company can open up to three branches within the same district without needing prior approval.
  
• This is permitted only if the company has complied with all applicable Nidhi Rules.
  
• All branches must operate under the same name and must not engage in prohibited activities.
  
• The limit is intended to ensure controlled expansion within a manageable region.
  
• Each branch must follow the same regulatory and operational guidelines as the head office.
  

2. Requirement for Profitability

• The company must have earned net profits continuously for the last three financial years.
  
• This condition is mandatory before opening any branches.
  
• Profitability indicates financial stability and operational capability for managing multiple locations.
  
• Without consistent profits, the company is not eligible to open or maintain branches.
  
• Audited financial statements are required to prove this condition.
  

3. Approval for Additional Branches

• If the company wants to open more than three branches within the same district, it must obtain prior approval from the Regional Director.
  
• This includes a formal application and supporting financial documentation.
  
• Approval is granted only after confirming full compliance with Nidhi Rules and the Companies Act.
  
• Branches beyond the approved number without permission are considered unauthorized.
  
• The company must maintain transparent records for each branch location.
  

4. Restrictions on Inter-District and Inter-State Branches

• A Nidhi Company cannot open a branch outside the district unless it has filed all annual returns and complied with statutory norms.
  
• Branches outside the state of registration are not allowed under normal conditions.
  
• Inter-state branch expansion requires special approval from the Ministry of Corporate Affairs (MCA).
  
• The intent is to keep the company’s operations localized and member-focused.
  
• Violations may lead to regulatory actions or branch closure orders.
  

5. Prohibited Practices Related to Branches

• A Nidhi Company cannot open branches through agents, franchises, or intermediaries.
  
• All branches must be fully managed and operated by the company’s staff.
  
• Commission-based collection or deposit handling is strictly prohibited.
  
• Use of third parties for opening or managing branches is a violation of Rule 10.
  
• The company must report the opening and closing of any branch to the Registrar of Companies.