Ascertain antecedents of ‘Nidhi’ companies before making investments: Collector

The district administration has cautioned the public against making investments in ‘Nidhi' companies, entities in the non-banking financial sector that are also called ‘mutual benefit societies'.

“There are companies working as ‘Nidhi’ or Mutual Benefit Society and engaging in financial transactions, but have not applied for recognition in this category. It is therefore important for the general public to be cautious and watchful while investing in such companies,” Collector Arjun Sharma said in an advisory.

The district administration has reached out to the public with the message after taking cognisance of the practice of some companies to accept deposits and investments despite rejection of the NDH-4 status (Every ‘Nidhi’ company, in keeping with Nidhi (Amendment) Rules, 2019, has to file this form for application for declaration as Nidhi Company) by the Central Government.

Companies whose NDH-4 forms have been rejected are barred from accepting money from the members or inviting general public to become members, Mr. Arjun Sharma said.

The general public of Karaikal are advised to verify the antecedents of the ‘Nidhi’ companies and ensure that they had been declared so by the Central government before seeking membership or depositing their hard-earned money, he added.