1. Verification of Membership and Compliance with Member Limits

• Confirm that the company has a minimum of 200 members within one year of incorporation.
  
• Verify the register of members, membership forms, and supporting documents.
  
• Ensure that only individuals are admitted as members, not firms or companies.
  
• Review resignation and termination of members, if any, for compliance with internal rules.
  
• Examine whether the company follows the rule that only members can accept deposits or receive loans.
  

2. Deposit Acceptance and Limits

• Check that deposits are accepted only from members and within permissible categories—savings, recurring, and fixed deposits.
  
• Verify the rate of interest offered and compare it with the maximum limits as per Nidhi Rules.
  
• Ensure that the total deposits do not exceed 20 times the Net Owned Funds (NOF).
  
• Confirm that at least 10% of the total deposits are maintained in unencumbered term deposits with a scheduled bank.
  
• Examine the deposit receipts issued and interest payments made to members.
  

3. Loan Disbursement and Documentation

• Ensure that loans are given only to members and against approved securities like gold, FD receipts, or property.
  
• Verify whether the loan limits based on NOF have been followed as per the prescribed slabs.
  
• Review loan application forms, sanction letters, collateral documentation, and loan registers.
  
• Check the rate of interest charged on loans and confirm it does not exceed 7.5% above the highest rate offered on deposits.
  
• Review the loan recovery mechanism, overdue balances, and default provisions.
  

4. Statutory Filing and Annual Compliance

• Confirm timely filing of NDH-1, NDH-3, AOC-4, MGT-7, and other required ROC forms.
  
• Ensure that Form NDH-1 is filed within 90 days of the first financial year-end, and NDH-3 is filed every six months.
  
• Review Board and AGM minutes to ensure decisions are properly documented and approved.
  
• Verify that the company has appointed a statutory auditor and conducted annual audits.
  
• Confirm that books of accounts, statutory registers, and financial statements are up to date.
  

5. Governance, Reserves, and Dividend Policy

• Check compliance with reserves creation and whether profits are used by the Nidhi Rules.
  
• Ensure dividends, if declared, do not exceed 25% and are approved in the general meeting.
  
• Review board resolutions, policy documents, and auditor reports for any non-compliance.
  
• Verify the internal controls, segregation of duties, and fraud risk safeguards in financial operations.
  
• Assess whether the governing body meetings are held regularly and decisions are recorded.