Ministry of Corporate Affairs cautions public against non-compliant Nidhi Companies

24 September 2026

The Ministry of Corporate Affairs issued an advisory cautioning the public against Nidhi Companies that promise unusually high returns without regulatory compliance. Nidhi Companies function under the Companies Act, 2013 and the Nidhi Rules, 2014, and must file Form NDH-4 to be declared as Nidhis by the Central Government; so far only 395 companies have received such declaration. The advisory noted that deposits in Nidhi Companies are not insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), so recovery can be difficult if a company fails or defrauds depositors. The public was asked to verify a company's status on the MCA website before investing and to avoid relying solely on promises of high returns.