The Ministry of Corporate Affairs issued a public advisory on 24 September warning people not to deposit money with a Nidhi company without checking its background and legal status, especially when an agent promises unusually high returns. The ministry said only 395 companies have been declared Nidhis by the Central Government to date. This report separates the verified event from the operational questions that remain.
MCA Nidhi company advisory: verified facts
| Advisory date | 24 September 2026 |
|---|---|
| Declared Nidhis | 395 companies |
| Required application | Form NDH-4 |
| Deposit insurance | Not covered by DICGC |
| Permitted relationship | Deposits and loans are member-based |
| Primary warning | Do not rely on unusually high-return promises |
What the MCA said
The Ministry of Corporate Affairs issued a public advisory on 24 September warning people not to deposit money with a Nidhi company without checking its background and legal status, especially when an agent promises unusually high returns. The ministry said only 395 companies have been declared Nidhis by the Central Government to date.
The verification step
A company that wants to function as a Nidhi must file Form NDH-4 to obtain or update its declaration. The MCA has published its list of declared Nidhis for public checking. A company name, registration certificate or salesperson’s assurance is not a substitute for confirming that declaration and reviewing the proposed terms.
Why the warning was issued
The ministry said its examination of NDH-4 applications found that many companies were not complying fully with the Companies Act and Nidhi Rules. It also observed that many companies functioning as Nidhis had not filed NDH-4 within the prescribed period. The advisory does not name every non-compliant operator, so savers still need transaction-level due diligence.
The missing safety net
Nidhi deposits are not bank deposits and are not insured by the Deposit Insurance and Credit Guarantee Corporation. That distinction is central. If a Nidhi fails or fraud occurs, recovery may be difficult or incomplete. A quoted return therefore cannot be compared with a bank deposit without also comparing legal status, liquidity, governance and recovery risk.
A practical saver checklist
Everyone else is repeating the warning. The useful Lapaas angle is a simple decision gate: verify the entity on the official MCA list; confirm membership eligibility; read maturity, withdrawal and penalty terms; ask for audited financial information; check complaints and enforcement history; and walk away if an agent discourages independent checks. Do not transfer money because a deadline or unusually high rate creates urgency.
What the 395 figure does not mean
Appearance on the declared list is a legal-status check, not a guarantee of performance or repayment. It does not replace assessment of current filings, governance or financial health. Conversely, a business describing itself as a Nidhi without the required declaration presents an immediate red flag. The official list should be the start of diligence, not the end.
Bottom line
The advisory converts a broad caution into two testable facts: official Nidhi status must be verified, and the deposit has no DICGC cover. Savers should treat any high-return promise as a reason for more checking, not less. The risk decision belongs before the transfer, when walking away is still easy.
Related Lapaas Voice coverage
RBI FPI KYC update, RBI FCNR final tally, DMI Finance NCD raise.
Frequently asked questions
What is a Nidhi company?
It is a mutual-benefit company that accepts deposits from and lends to its members under the Companies Act and Nidhi Rules.
How can a saver verify one?
Check whether the Central Government has declared it a Nidhi and review the official MCA list and company background.
Are Nidhi deposits insured by DICGC?
No. The MCA advisory explicitly says these deposits do not receive DICGC insurance.
What did the MCA find?
It said many companies were not fully compliant and many operating as Nidhis had missed the required NDH-4 filing timeline.
Earliest credible public disclosure: 2026-09-24.
Get the day’s top stories in your inbox
One concise email. No spam, unsubscribe anytime.
