MCA issues advisory - cautions public against high-return promises by non-compliant Nidhi Companies

The Ministry of Corporate Affairs (MCA) has issued a public advisory cautioning individuals against making financial investments based on high-return promises made by non-compliant Nidhi Companies. The advisory emphasizes that many companies operating as Nidhi companies have failed to submit their NDH-4 applications within the stipulated time frame or comply with statutory provisions. The MCA noted that deposits accepted by Nidhi companies are not insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), meaning recovery could be difficult if a company fails. Nidhi companies are mutual-benefit societies regulated under the Companies Act, 2013 and Nidhi Rules, 2014, permitted to deal exclusively with their members. The public has been advised to verify company credentials against the list of 395 companies declared as Nidhis available on the MCA website.