Govt amends rules governing Nidhi companies; prior declaration 'mandatory'

The ministry said during 2014-2019, more than 10,000 companies got incorporated

The Ministry of Corporate Affairs (MCA) has amended rules governing Nidhi companies, whereby its prior declaration will be mandatory for certain entities before they start accepting deposits. Now, public companies desiring to function as Nidhis must obtain prior declaration from the central government before accepting deposits, the Ministry said in a release on Wednesday.

“To safeguard the interest of the general public, it has become imperative that before becoming its member, one must ensure declaration of a company as a Nidhi by the central government,” it said.

A Nidhi company, especially popular in southern states like Tamil Nadu, is a