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A nidhi company, is one that belongs to the non-banking Indian finance sector and is recognized under section 406 of the Companies Act, 2013.
Their core business is borrowing and lending money between their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. They are regulated by Ministry of Corporate Affairs.
Reserve Bank of India is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that these companies deal with their shareholder-members only.
Nidhi Company is a company incorporated as such with an objective of :
Cultivating the habit of thrift;
Saving amongst its members;
Receiving deposits from its members; and
Lending money to it members.
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