Nidhi Company has to invest in unencumbered term deposits with a scheduled commercial bank or post office deposits (other than a co-operative bank or regional rural bank) at least 10 percent. of the deposits outstanding at the close of business on the last working day of the second preceding month.

However, in case of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such conditions and time limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10 percent.