Nidhi Company refers to a company registered under the Companies Act, 2013, which has the main aim of developing the habit of savings amongst the members. Nidhi companies are permitted to take the deposit from its members and give it on to its members exclusively. Thus, the funds provided for a Nidhi company are only from its members (shareholders) and can be used also only by the shareholders of the Nidhi Company.
Nidhi company belongs to the class of NBFCs and RBI is authorised to issue directions to them in concerns relating to their deposit agreement activities. However, keeping in mind the fact that these Nidhis deal with their shareholder-members only, RBI has spared the notified Nidhis from the core provisions of the RBI Act and other directions that can be applied to NBFCs. Thus, Nidhi Company is an excellent entity for taking deposits from and lending to a particular group of people.
Reasons to register a Nidhi company
Distinct Legal Company
Ease of management