Nidhi Amendment Rules, 2022 and NDH-4
The Nidhi Company NDH-4 Requirement was significantly strengthened by the 2022 framework.
The Nidhi (Amendment) Rules, 2022 introduced a specific framework for public companies incorporated after commencement of the 2022 amendments and desirous of being declared as Nidhis.
Under Rule 3B, such a company must comply with the Nidhi Company NDH-4 Requirement within 120 days of incorporation.
For this purpose, the company must satisfy prescribed conditions including:
- At least 200 members; and
- Net Owned Funds of at least ₹20 lakh.
The promoters and directors are also required to meet the prescribed fit and proper person criteria. MCA’s official explanation of the 2022 amendments confirms these conditions.
Is the 120-Day Timeline Applicable to Every Nidhi?
The Nidhi Company NDH-4 Requirement does not carry one universal 120-day deadline for every company.
No, the 120-day timeline is not applicable to every Nidhi Company.
The Nidhi Company NDH-4 Requirement under Rule 3B applies specifically to public companies incorporated after commencement of the Nidhi (Amendment) Rules, 2022 and seeking declaration as Nidhis.
Companies incorporated under earlier frameworks may be subject to different declaration or status-updation timelines.
For example, the 2019 framework prescribed separate timelines for Nidhis incorporated before and after commencement of the Nidhi (Amendment) Rules, 2019.
Therefore, compliance with the Nidhi Company NDH-4 Requirement must be checked according to the company’s incorporation date and applicable provisions instead of using one uniform filing deadline.
Key Conditions under Rule 3B
For companies covered by Rule 3B, the Nidhi Company NDH-4 Requirement is linked to specific eligibility conditions.
The principal conditions are:
|
Requirement
|
Prescribed Condition
|
|
Form
|
Form NDH-4 |
| Filing timeline |
Within 120 days of incorporation
|
|
Minimum members
|
At least 200 |
| Net Owned Funds |
₹20 lakh or more
|
|
Promoters and directors
|
Must satisfy fit and proper person criteria
|
These conditions apply to companies covered by the post-2022 Rule 3B framework.
Fit and Proper Person Criteria
The Nidhi Company NDH-4 Requirement also includes scrutiny of promoters and directors where Rule 3B applies.
A company covered by Rule 3B must ensure that its promoters and directors satisfy the prescribed fit and proper person criteria.
The assessment considers factors such as:
- Integrity;
- Honesty;
- Ethical behaviour;
- Reputation;
- Fairness; and
- Character.
The Rules also identify circumstances that may affect whether a person is regarded as fit and proper. These include certain pending criminal or economic-offence proceedings, restraint or debarment orders, conviction for an offence involving moral turpitude, undischarged insolvency, classification as a wilful defaulter, or declaration as a fugitive economic offender.
The Nidhi Company NDH-4 Requirement therefore involves more than simply submitting a form. Eligibility of the promoters and directors is also relevant.
How is Form NDH-4 Processed?
Processing is another important part of the Nidhi Company NDH-4 Requirement.
Once a company covered by Rule 3B files Form NDH-4, the Central Government examines the application.
The Central Government is required to convey its decision within 45 days from receipt of the application. Where no decision is conveyed within this period, approval is treated as deemed to have been granted under the Rule 3B framework.
This deemed-approval provision should be read together with the conditions applicable under Rule 3B.
The Nidhi Company NDH-4 Requirement therefore requires both timely filing and satisfaction of the prescribed eligibility conditions.
What Happens if NDH-4 Compliance is Not Met?
The Nidhi Company NDH-4 Requirement carries consequences when the applicable declaration framework is not followed.
Failure to comply with the applicable Nidhi Company NDH-4 Requirement can have significant regulatory consequences.
Under the relevant provisions of the Nidhi Rules, where a company fails to comply with the applicable declaration requirement, restrictions can apply to its activities and filings.
The 2019 rules, for example, provide restrictions on filing Form SH-7 and Form PAS-3 for specified Nidhis that fail to comply with the applicable declaration requirement.
Under the amended framework, consequences can also affect the company’s ability to accept deposits or provide loans where prescribed declaration requirements are not complied with.
The exact consequence should therefore be determined according to the category of the company, its incorporation date and the provision applicable to it.
Minimum Paid-up Capital and Net Owned Funds
Capital and Net Owned Fund conditions are closely connected with the Nidhi Company NDH-4 Requirement for companies covered by Rule 3B.
The Nidhi (Amendment) Rules, 2022 increased the minimum paid-up equity share capital requirement for a Nidhi to ₹10 lakh.
For companies seeking declaration under the post-2022 framework, MCA has also specified a minimum membership of 200 and Net Owned Funds of ₹20 lakh for the NDH-4 application.
These requirements should be checked separately from the filing deadline because satisfying the Nidhi Company NDH-4 Requirement involves both filing and eligibility conditions.
Restrictions on Borrowing and Member Transactions
The Nidhi Company NDH-4 Requirement forms only one part of the wider compliance framework for Nidhis.
The amended Nidhi Rules also contain restrictions governing the manner in which Nidhis conduct their financial activities.
A Nidhi primarily operates by accepting deposits from and providing loans to its own members. MCA has reiterated that Nidhi Companies are mutual-benefit companies and can accept deposits and give loans only to their members.
The Nidhi Company NDH-4 Requirement should therefore be reviewed together with the other operational restrictions prescribed under the Nidhi Rules.
Changes Related to Closing a Branch
Branch compliance is separate from the Nidhi Company NDH-4 Requirement, but it remains important under the amended Nidhi Rules.
The 2022 amendments introduced a more structured process for closing a branch of a Nidhi Company.
A Nidhi is required to obtain the necessary Board approval and follow the prescribed regulatory process for branch closure, including dealing with repayment of existing deposits and recovery of existing loans.
The relevant branch compliance requirements should therefore be reviewed independently from the Nidhi Company NDH-4 Requirement.
MCA Advisory 2026: Why the Public Should Verify Nidhi Status
The Nidhi Company NDH-4 Requirement is also important from a depositor-awareness perspective.
The latest MCA advisory gives the Nidhi Company NDH-4 Requirement an important public-protection context.
MCA observed that many companies functioning as Nidhis were not complying with the applicable provisions of the Companies Act and Nidhi Rules in full. It also observed that many companies had not submitted Form NDH-4 within the stipulated timeframe.
As a result, MCA advised members of the public to independently verify whether a company has been declared as a Nidhi by the Central Government before depositing money.
MCA also cautioned against making financial decisions based only on unusually high returns promised by companies, agents or informal sources.
The advisory states that 395 companies had been declared as Nidhis by the Central Government under the Companies Acts, 1956 and 2013 as on 24 September 2026.
This figure should not automatically be described as the number of all currently active Nidhi Companies. It represents the companies declared as Nidhis by the Central Government, as stated by MCA in the advisory.
Are Nidhi Deposits Insured by DICGC?
The Nidhi Company NDH-4 Requirement should not be confused with deposit insurance protection.
No. Deposits accepted by Nidhi Companies are not insured by DICGC.
MCA expressly highlighted this point in its September 2026 advisory.
This means members should not assume that deposits with a Nidhi carry the same DICGC deposit-insurance protection that may apply to eligible deposits with insured banks.
The Nidhi Company NDH-4 Requirement is therefore relevant not only for company compliance but also for members who want to verify the formal status of the company before depositing funds.
How Can Members Verify a Nidhi Company?
The Nidhi Company NDH-4 Requirement makes official status verification especially relevant for members.
Before depositing money, members should verify whether the company has actually been declared as a Nidhi by the Central Government.
MCA has published the list of declared Nidhi Companies for public information and specifically referred members of the public to its official list in the September 2026 advisory.
Members should not rely only on:
- The words “Nidhi Limited” in a company name;
- Statements made by an agent;
- Promotional material;
- Advertisements;
- Unusually high promised returns; or
- Informal assurances.
The Nidhi Company NDH-4 Requirement provides a formal declaration framework, but members should independently verify official records before making a financial decision.
Compliance Checklist for Nidhi Companies
A practical review of the Nidhi Company NDH-4 Requirement should be part of every Nidhi compliance check.
A Nidhi Company should review:
- Whether the Nidhi Company NDH-4 Requirement applies to it;
- Whether Form NDH-4 was filed within the applicable timeline;
- Whether Central Government declaration or status updation has been completed, where required;
- Whether the prescribed minimum number of members is satisfied;
- Whether the applicable Net Owned Fund requirement is maintained;
- Whether minimum paid-up equity share capital requirements are met;
- Whether promoters and directors satisfy fit and proper criteria, where applicable;
- Whether deposit and lending activities comply with the Nidhi Rules;
- Whether applicable branch requirements have been followed; and
- Whether other compliances under the Companies Act and Nidhi Rules are complete.
A regular review of the Nidhi Company NDH-4 Requirement is particularly important where there has been a delay in filing, a change in status or uncertainty regarding the company’s declaration.
Key Takeaways
The Nidhi Company NDH-4 Requirement is not a new compliance created by the September 2026 MCA advisory.
MCA’s advisory reiterates the existing legal requirement and highlights cases of non-compliance observed during examination of NDH-4 applications.
For companies covered by Rule 3B of the Nidhi (Amendment) Rules, 2022, Form NDH-4 must be filed within 120 days of incorporation, subject to the company meeting prescribed conditions including:
- At least 200 members;
- Net Owned Funds of ₹20 lakh or more; and
- Fit and proper person requirements for promoters and directors.
However, the 120-day timeline does not apply uniformly to every Nidhi Company.
The Nidhi Company NDH-4 Requirement should therefore always be assessed with reference to the company’s incorporation date, declaration status and the Nidhi Rules applicable to it.
Need Help with Nidhi Company Compliance?
Managing the Nidhi Company NDH-4 Requirementinvolves checking the applicable filing timeline, declaration status, member requirements, Net Owned Funds and other conditions prescribed under the Nidhi Rules. If you are planning to start a Nidhi, you can also explore our Nidhi Company Registration service to understand the incorporation and post-registration requirements.
Existing Nidhis should regularly review their statutory obligations and ensure that the required MCA forms and annual filings are completed on time. You can read our detailed guide on Nidhi Company Compliances or get professional support through our Nidhi Company Annual Filing service.
Ebizfiling can assist with reviewing the applicable NDH-4 requirement, checking pending Nidhi compliances and supporting the required MCA filings in accordance with the applicable provisions.
Talk to an Expert for assistance with Nidhi Company compliance and filings.
Call: +91 9643203209
Email: info@ebizfiling.com
Conclusion
The Nidhi Company NDH-4 Requirement continues to be a key compliance obligation under the Nidhi regulatory framework.
The MCA advisory dated 24 September 2026 has not introduced a new rule or a fresh general deadline. Instead, it reiterates the need for companies seeking to function as Nidhis to comply with the applicable Form NDH-4 declaration or status-updation framework.
MCA’s statement that 395 companies had been declared as Nidhis, together with its warning regarding unusually high returns and clarification that Nidhi deposits are not insured by DICGC, makes official verification particularly important.
Companies should therefore review the Nidhi Company NDH-4 Requirement according to their date of incorporation, existing regulatory status and the provisions of the Nidhi Rules applicable to them.
Frequently Asked Questions
1. Is Form NDH-4 mandatory even if a company is already incorporated with “Nidhi Limited” in its name?
Yes. Merely having “Nidhi Limited” in the company name does not by itself satisfy the declaration requirement. MCA has reiterated that every company intending to function as a Nidhi must file Form NDH-4 for declaration or updation of its Nidhi status, as applicable under the Nidhi Rules.
2. Does the 120-day NDH-4 filing period apply to all Nidhi Companies?
No. The 120-day timeline applies to public companies covered by Rule 3B of the Nidhi Rules after the 2022 amendment. Older Nidhis may be governed by earlier declaration or status-updation timelines. Therefore, the correct NDH-4 deadline depends on the company’s incorporation date and the legal framework applicable to it.
3. What happens if a Nidhi Company files NDH-4 after the prescribed timeline?
Late or non-compliance with the applicable NDH-4 requirement can attract restrictions under the Nidhi Rules. For certain categories of Nidhis, non-compliance can restrict filings such as Form SH-7 and PAS-3. MCA’s September 2026 advisory also noted that several companies had failed to submit NDH-4 within the stipulated timeframe.
4. Can a Nidhi Company accept deposits before its NDH-4 declaration is completed?
A company should not assume that incorporation alone permits unrestricted Nidhi operations. The ability to function as a Nidhi depends on compliance with the applicable declaration framework under Section 406 and the Nidhi Rules. Where declaration requirements are not fulfilled, restrictions may apply to deposit-taking and lending activities under the relevant provisions.
5. Is deemed approval available if the Central Government does not respond to Form NDH-4?
For companies covered by Rule 3B, the Central Government is required to communicate its decision within the prescribed period. If no decision is conveyed within that period, the application may be treated as deemed approved, subject to the conditions and framework of Rule 3B. This deemed approval concept should not be applied automatically to every historical NDH-4 filing category.
6. Can a company with fewer than 200 members file Form NDH-4 under Rule 3B?
A company applying under Rule 3B must satisfy the prescribed eligibility conditions, including having at least 200 members and Net Owned Funds of ₹20 lakh or more. If these conditions are not met, the company may not satisfy the requirements for declaration under that framework.
7. Does the list of 395 declared Nidhis mean that only 395 Nidhi Companies are currently active in India?
Not necessarily. MCA stated that 395 companies had been declared as Nidhis by the Central Government under the Companies Acts, 1956 and 2013 as on the advisory date. This number should not automatically be treated as the count of all currently active companies. MCA separately advised the public to verify declared status before depositing money.
8. Are deposits with a declared Nidhi Company protected by DICGC insurance?
No. MCA has expressly clarified that deposits accepted by Nidhi Companies are not insured by the Deposit Insurance and Credit Guarantee Corporation. This applies even where the company has been validly declared as a Nidhi.
9. Can Ebizfiling help determine which NDH-4 timeline applies to an existing Nidhi Company?
Yes. Ebizfiling can review the company’s incorporation date, existing Nidhi status, applicable amendment framework and filing history to identify which NDH-4 declaration or status-updation requirement may apply. This is particularly useful where the company was incorporated before the 2022 amendment or has an older pending compliance history.
10. Can Ebizfiling assist if Form NDH-4 was not filed within the applicable period?
Yes. Ebizfiling can help review the company’s present compliance position, identify pending MCA filings, assess the applicable Nidhi Rules and assist with the available filing and regularisation steps based on the company’s specific facts. However, the exact course of action depends on the incorporation date, declaration status and any previous MCA action affecting the company.
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