This page is informational and is not legal advice. It describes rules, orders and rulings as published or reported on the dates shown; read the primary text before relying on any of it.
At a glance
- Where the scheme began
- Udupi, 8 October 1928, Syndicate Bank
- Institution types
- Urban co-operative banks, DCCBs, Souharda co-operatives, a regional rural bank
- Agent commission cap
- No state cap found
- Notable ruling
- Karnataka High Court, April 2026, on the employment status of pigmy agents
- State law for Souharda bodies
- Karnataka Souharda Sahakari Act 1997
Karnataka is the origin of the product. Syndicate Bank launched the Pigmy Deposit Scheme in Udupi on 8 October 1928, and the coastal belt around Udupi and Mangaluru remains the region most associated with it. The full story is in the history of the pigmy deposit scheme.
What operates here
The state has an unusually varied set of institutions running daily collection: urban co-operative banks, district central co-operative banks, Souharda co-operatives registered under the Karnataka Souharda Sahakari Act 1997, and at least one regional rural bank with a daily-deposit product.
That variety matters to a depositor, because deposit insurance follows the institution's legal character rather than the look of the product. A pigmy account at a co-operative bank carries DICGC cover; the same-looking product at a society does not.
What the directory records here
Karnataka is the state Pigmity's directory covers most closely, and the records show the variety rather than a pattern:
- Chikkamagaluru District Central Co-operative Bank, which publishes a full rate and term schedule, and the condition that an account closed inside a year earns no interest at all.
- South Canara District Central Co-operative Bank, whose Nithya Dhara scheme names the daily product in the coastal belt where it began.
- Ballari District Central Co-operative Bank, which describes agent collection at home or at work and records a nomination on application.
- Canara Bank's Nitya Nidhi, the descendant of the original Syndicate Bank scheme after the 2020 amalgamation, and the one commercial bank in the set.
- Karnataka Grameena Bank, the state's single regional rural bank since Karnataka Vikas Grameena Bank and Karnataka Gramin Bank were amalgamated into it on 1 May 2025, whose New Nithya Nidhi scheme pays nothing before a year and its full rate only at maturity.
- Sree Charan Souharda Co-operative Bank, a Souharda co-operative bank, the category the Karnataka Souharda Sahakari Act 1997 creates, whose pigmy account is paid by daily transfer from a savings account rather than cash at the door.
Two things follow for a depositor. The first is that the institution's category, not the scheme name, decides both insurance and the complaint forum: our guides on what happens if the institution fails and where to complain turn on that distinction. The second is that exit terms here differ sharply between institutions that publish them, which our early-closure comparison sets side by side.
The ruling that unsettled agent status
In April 2026 the Karnataka High Court held that the pigmy agents of a regional rural bank were employees of the bank rather than independent business facilitators, so GST was not leviable on their commission. The Court described a master-servant relationship resting on control, supervision and economic dependence.
It binds only in Karnataka, and it turned on the facts of one institution. But if agents are employees for tax, the same reasoning raises provident fund and gratuity questions that nobody has publicly worked through. We set out what is and is not settled in pigmy agent commission.
What we could not establish
We found no Karnataka order capping agent commission, of the kind Maharashtra has issued. Absence of a published order is not proof that none exists.