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Government Schemes 25 September 2026 · Event date: 24 September 2026
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MCA issues advisory - cautions public against high-return promises by non-compliant Nidhi Companies

The Ministry of Corporate Affairs has issued an advisory warning the public against investing in non-compliant Nidhi Companies that promise unusually high returns. Many such companies have failed to submit NDH-4 applications or comply with the Companies Act and Nidhi Rules. The public is urged to independently verify company status, noting that Nidhi deposits are not insured by DICGC.

Why It Matters

This is relevant for competitive exam aspirants as it highlights financial regulations, investor protection, and the role of the Ministry of Corporate Affairs in overseeing Nidhi Companies.

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In Simple Words

The Ministry of Corporate Affairs warns the public against high-return promises made by certain Nidhi Companies. Many companies are not following the required rules or submitting their NDH-4 applications on time.

Citizens should verify if a company is officially declared as a Nidhi by the Central Government. Furthermore, deposits in Nidhi Companies are not insured by DICGC, meaning money can be lost if a company fails.

Key Points

  • MCA issued an advisory warning the public against high-return promises by non-compliant Nidhi Companies.
  • Many Nidhi Companies failed to comply with applicable provisions of the Act and rules or submit NDH-4 applications in time.
  • Companies wanting to function as a Nidhi must file Form NDH-4 to get declared or updated as a Nidhi.
  • Deposits accepted by Nidhi Companies are not insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
  • Nidhi companies are mutual-benefit companies regulated by MCA under the Companies Act, 2013 and Nidhi Rules, 2014.
  • Nidhi companies can accept deposits and give loans only to their members.
  • A list of 395 companies declared as Nidhis by the Central Government is placed on the MCA website.
  • A list of active Nidhi Companies was published on the MCA portal on 03.11.2025.

Exam Angle

Ministry
Ministry of Corporate Affairs
Regulated Act
Companies Act, 2013 and Nidhi Rules, 2014
Form required
Form NDH-4
Deposit insurance
Not insured by DICGC

A. No, deposits accepted by Nidhi Companies are NOT insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Source: Press Information Bureau

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