Baba Dayal Das founded a movement of purification of Indian religion practices in India, and named it as the Nirankaris. Baba Dayal Das was born in 1783, into a Malhotra Khatri family in Peshawar and grew up as a devout, deeply interested in rituals and religions. After his parents died, Baba Dayal Das went to Rawalpindi where he opened an apothecary shop. Apparently disappointed with contemporary religion, Baba Dayal Das concluded that Sikhism has become corrupt, filled with deception, superstition and error. Sometime during the decade of the 1840s, he called for the return of Sikhism to its origins and emphasized the worship of God as formless. Such an advance meant an elimination of idols, rituals connected to idolatry, and the Brahman priests who conducted these rituals. A repudiation of Brahman priests also meant rejection of those Sikhs who were allied with them. Baba Dayal Das ran into opposition from the recognized religious authorities; consequently and the movement advanced in secret until the British gained control of the Punjab.

The section of Nirankaris concentrated more on deficiencies in religious practice than on an analysis of theology. The suitable path to God was through worship based on meditation rather than complex ritual. Baba Dayal Das encouraged his disciples to meet each morning for daily worship in their dharmashalas. He stressed out the importance and power of Guru Nanak and of the Adi Granth, which was the source of all authority and knowledge.

The disciples of Baba Dayal Das worshipped the formless God and obeyed the shabad of the guru in the Adi Granth, they also cleaned the shoes and feet of the congregation as an act of humility. In harmony with Sikh tradition, Baba Dayal Das taught religious regulations for the householder, that is, an individual who kept his familiar and social ties and had not withdrawn into the role of a priest. Moreover, Baba Dayal Das also taught that women should not be treated as unclean at childbirth; disciples should not use astrology or horoscopes in setting the time for ceremonies; the dowry should not be displayed at marriages; neither lighted lamps nor blessed sweets, prasad, should be placed in rivers; and no one should feed Brahmans as payment for conducting rituals. Eating meat, drinking liquor, lying, cheating and using false weights were all restricted.

Baba Dayal Das instructed his followers to be focused in a strict moral code and thus use only the proper life-cycle rituals was propagated. The new ceremonies in the society included those of birth, naming of a child, a shortened marriage ceremony that had at its core a proper relevance to the Adi Granth, and a death-rite requiring that the body be immersed in a river or cremated. All ceremonies eliminated the services of a Brahman priest.

Slowly the Nirankaris grew and the group attracted new members. Because of persecution, Baba Dayal Das purchased land on the edge of Rawalpindi where he constructed a dharmashala, which became a centre of worship and was known as the Nirankari Darbar. Baba Dayal Das died on 30 January 1855 before he could bring organization and cohesion to this movement. The Nirankaris of Rawalpindi placed his body in the Lei River at a spot where he used to meditate. Later the spot was known as Dayalsar and considered sacred by the Nirankaris. Before his death Baba Dayal Das named his son, Baba Darbara Singh to succeed him.