Loan, Deposit and RD Management Features in Nidhi Software

Good Nidhi loan deposit software carries the Nidhi Rules inside its workflows, so a cashier cannot accidentally break one. Deposits, recurring deposits and loans are where a Nidhi earns and where it gets into trouble, which makes these modules the first thing to test. Below are the features worth checking, tied to the rules each one supports.

In this guide

• Deposit module: what it should enforce
• RD schedules and premature withdrawal
• Loan module: security and limits
• Ratios and statutory reports
• Other things to test
• FAQs

Deposit module: what it should enforce

Under Rule 13, a Nidhi takes deposits only from members. The software should refuse a deposit on an account that is not a member account, and it should handle each product with its own limits:

• Fixed deposits for 6 to 60 months.
• Recurring deposits for 12 to 60 months.
• Savings accounts with a balance cap of Rs 1 lakh.

Our deposit rules for Nidhi companies post explains the limits and the 1:20 ratio in plain terms. Treat the figures as per the Rules as we read them, and confirm the current text.

RD schedules and premature withdrawal

Recurring deposits need an instalment schedule, a missed-instalment view and a maturity calculation. Check that the system can show which members are behind this month without exporting to a spreadsheet.

Premature withdrawal has its own rule: none within 3 months, no interest between 3 and 6 months, and reduced interest after that, as the rule text is summarised. A good system applies this automatically at the time of closure and prints the calculation for the member. Ask the vendor to show a test case rather than describe it.

Loan module: security and limits

Loans go only to members (Rules 15 and 16). The loan screen should record the type of security and apply what goes with it. As we read the Rules, gold and jewellery loans are repaid within a year, and immovable property loans can run up to 7 years with a cap of 50% of loans outstanding. Fixed deposits, government securities and insurance policies are also accepted.

Per-member loan limits scale with the Nidhi’s deposits, from Rs 2 lakh where deposits are under Rs 2 crore up to Rs 15 lakh above Rs 50 crore. Interest on loans is capped at 7.5% above the highest deposit rate on a reducing balance. The software should calculate on that basis and warn when a loan crosses a limit. Please read the current Rules before you configure any figure.

Ratios and statutory reports

Report	Why you need it
NOF to deposits	Must not exceed 1:20
Unencumbered term deposits	At least 10% of outstanding deposits, in the Nidhi’s name with a scheduled commercial bank
Member count and NOF	Needed for NDH-4 and for later conditions
Deposit and loan summaries	Feed NDH-3 and the auditor’s work

These reports save the most time at half-year end and at audit. For how they connect to the yearly calendar, see the annual compliance checklist.

Other things to test

• Daily cash book and day-end closing, with locked past dates.
• Member passbook and statement print.
• Interest posting that you can preview before it is committed.
• A log of who changed what.

Compare the whole system using the criteria in Nidhi expert software and other options: how to compare. Cost questions are in Nidhi software cost in India, and the overall buying view is in how to choose Nidhi management software.

Related reading

• Nidhi Company Registration in India: Process, Documents, Cost and Timeline
• How to Choose Nidhi Management Software
• Nidhi Expert Software and Other Options: How to Compare
• Nidhi Software Cost in India
• Deposit Rules for Nidhi Companies: Limits and the 1:20 Ratio

Need help with your Nidhi company? See our Nidhi company registration service, call +91 93117 95484, or write to mail@taxhint.in. You can also read about our Nidhi management software.

FAQs

What deposit types should Nidhi software support?

Fixed deposits of 6 to 60 months, recurring deposits of 12 to 60 months, and savings accounts with a Rs 1 lakh balance cap, all for members only.

Should the software calculate loan interest on a reducing balance?

Yes. The Rules cap loan interest at 7.5% above the highest deposit rate and charge it on a reducing balance, so the system should work that way.

Can the software check the 1:20 ratio?

It should report NOF against deposits and show the 10% unencumbered term deposit position. Test this with your own figures before buying.

Do rule limits in the software need updating?

They do when the Rules change. Ask how updates are delivered and check the current Rule text yourself.

More in this Nidhi series