Explain the characteristics of a Nidhi Company under the Companies Act, 2013 and the Nidhi Rules, 2014.

Characteristics of a Nidhi Company The characteristics of a Nidhi Company can be summarized below: The object of Nidhi should be cultivating the habit of thrift and savings amongst the members and receiving deposits from and lending to its members for their mutual benefits. It is allowed to transact business only with its members. Hence, in case a person wishes to place a deposit with a Nidhi or borrow money from a Nidhi, he must first become a member (shareholder) of the Nidhi by subscribing to 10 equity shares or shares equivalent to ₹100. After the commencement of the Companies Act, 2013, no Nidhi shall issue preference shares. They are allowed to open branches subject to compliance with Rule 10 of the Nidhi Rules, 2014, but do not operate on a Pan India basis. They are incorporated as public companies with a minimum paid-up equity share capital of ₹10,00,000. Loans may be provided only to its members and should be fully secured. A director of a Nidhi shall be a member and shall hold office for a term up to 10 consecutive years on the Board of a Nidhi. A Nidhi shall not declare a dividend exceeding 25% per cent in a financial year. Nidhi Company shall adhere to the prudential norms for revenue recognition and classification of assets in respect of mortgage loans or jewel loans as provided in Rule 20 of the Nidhis Rules, 2014.