1.  Statutory Capital Requirement at Incorporation

• A Nidhi Company must be incorporated as a public company.
  
• The minimum paid-up equity share capital required is ₹5,00,000.
  
• This capital must be in the form of equity shares only.
  
• Preference shares are not permitted under the Nidhi Company structure.
  
• The capital must be deposited in the company’s bank account at the time of incorporation.
  

2.  Post-Incorporation Capital Growth Norms

• Within one year, the Net Owned Funds (NOF) must reach at least ₹10,00,000.
  
• Net Owned Funds = Paid-up equity share capital + free reserves – accumulated losses.
  
• The capital growth ensures financial stability and operational capacity.
  
• Maintaining minimum capital levels is essential for expanding deposits.
  
• The capital must be reported in compliance filings to the Registrar of Companies.
  

3.  Restrictions on Share Capital Structure

• Only equity share capital is allowed in a Nidhi Company.
  
• Issuance of preference shares or debentures is not permitted.
  
• Members must subscribe to a minimum number of shares as defined in the Articles of Association.
  
• The share capital must be fully subscribed and paid up at the time of registration.
  
• Any change in capital structure must be approved and filed with the Registrar.
  

4.  Utilization and Maintenance of Capital

• Capital raised must be used strictly for member-related financial activities.
  
• It cannot be diverted to non-member transactions or unauthorized businesses.
  
• Capital must support lending and deposit-taking functions among members.
  
• Minimum capital thresholds must be maintained throughout operations.
  
• The company must hold 10% of total deposits as unencumbered term deposits.
  

5.  Reporting and Compliance Obligations

• The initial paid-up capital must be declared in the SPICe+ incorporation form.
  
• Net Owned Funds are reported through Form NDH-1 annually.
  
• Audited financials must reflect capital structure and reserves accurately.
  
• Any reduction in capital below the prescribed limits may lead to disqualification.
  
• The company must comply with both capital and reserve-related conditions to retain Nidhi status.