Under Nidhi Rule, 2014 as per Rule 6 the following are the restrictions on a Nidhi Company and what a Nidhi Company should not have;
- It cannot continue on the business of chit fund, hiring purchase finance, leasing finance, insurance or acquisition of securities issued by a body corporate.
- It should not open any current accounts with its members.
- It is not permitted to issue any preference shares, debentures or any other debt in any form no matter what.
- It cannot acquire any other company by purchase of securities or control the configuration of the Board of Directors of any other company , it can only be done if the company has taken an approval of the Regional Director having jurisdiction over such a Nidhi Company.
- A Nidhi Company cannot accept deposits or lend money to any person other than a member of that company.
- It is not allowed to take any assets lodged by its members as a security.
- A Nidhi Company needs to stay aloof from entering to any partnership arrangement leading to borrowing or lending activities.
- It is devoid from paying any brokerage or incentives for mobilizing deposits from members or for deployment of funds or restricted from granting any loans.
- It is not suppose to take deposits or lend to a Body Corporate.
- Any form of for soliciting deposit shouldn't be advertised or cause to be issued by a Nidhi Company.