1. Ministry of Corporate Affairs (MCA) Oversight

• The primary regulator of Nidhi Companies is the Ministry of Corporate Affairs (MCA).
  
• MCA issues rules, guidelines, and notifications applicable to all Nidhi Companies.
  
• It monitors the registration, functioning, and compliance of Nidhi Companies.
  
• MCA enforces provisions under the Companies Act, 2013, and Nidhi Rules, 2014.
  
• It has the authority to inspect and take action in case of violations.
  

2. Regulatory Coverage under Companies Act, 2013

• Nidhi Companies are classified under Section 406 of the Companies Act, 2013.
  
• This section defines Nidhi Companies and grants MCA the power to create rules for them.
  
• Companies must adhere to rules related to incorporation, operations, and reporting.
  
• Any changes to structure, management, or objects require MCA approval.
  
• All compliance filings are submitted through the MCA portal.
  

3. Governance by Nidhi Rules, 2014

• The Nidhi Rules, 2014, provide detailed guidelines for managing a Nidhi Company.
  
• These rules define eligibility conditions, deposit limits, lending rules, and member management.
  
• The rules limit activities to member-based operations and prohibit certain financial services.
  
• Non-compliance with these rules can result in penalties or cancellation of registration.
  
• The rules are periodically updated to strengthen financial discipline and transparency.
  

4. Role of Registrar of Companies (ROC)

• The Registrar of Companies (ROC) operates under the MCA to regulate Nidhi Companies regionally.
  
• The ROC verifies documents, registration applications, and annual returns.
  
• It ensures that companies maintain required membership numbers and financial ratios.
  
• The ROC also processes extension requests and reviews object clause changes.
  
• It acts on grievances and complaints raised against Nidhi Companies.
  

5. Limited Role of Reserve Bank of India (RBI)

• RBI does not regulate the day-to-day operations of Nidhi Companies.
  
• Since Nidhi Companies deal only with their members, they are exempt from core RBI regulations.
  
• However, the RBI has the power to issue directions in specific financial matters if required.
  
• Nidhi Companies must not violate the RBI’s general directions on deposit-taking practices.
  
• They are also required to avoid activities that overlap with banking or NBFC services.