The growing regional imbalance in Nidhi company operations has become a pressing concern for regulators and industry stakeholders alike. Data reveals a concentration of healthy, well-functioning Nidhi companies in southern and western states, while northern and eastern regions show higher rates of dormancy and non-compliance. This divergence stems from multiple factors, including varying levels of financial literacy, differences in state-level regulatory enforcement, and the historical presence of cooperative banking culture in certain regions. The disparity has become particularly noticeable as digital transformation accelerates, with urban-centric Nidhi companies adapting more quickly than their rural counterparts.

Policymakers are grappling with how to address these geographical imbalances without compromising the sector’s regulatory integrity. Some advocate for targeted capacity-building programs in lagging regions, including training for potential promoters and awareness campaigns about the Nidhi model’s benefits. Others suggest incentivizing stronger Nidhi companies to expand into underserved areas through streamlined branch approval processes. However, regulators remain cautious about introducing region-specific rules that could create regulatory arbitrage or weaken oversight standards in certain markets.

The debate highlights fundamental questions about financial inclusion strategies in India’s diverse economic landscape. While the Nidhi model was conceived as a uniform national framework for member-based thrift activities, its implementation has revealed significant regional adaptability challenges. As discussions continue, stakeholders are seeking a balanced approach that maintains core regulatory principles while allowing for localized solutions that account for varying levels of financial infrastructure and community needs across different parts of the country.