Nidhi Companies are further trendy in South India and are much localized single geographic point institutions. They are mutual profit societies, as results of their dealings are restricted entirely to the members; and membership is restricted to folks.
The principal offer of funds is that the contribution from the members. The loans are given to the members at relatively low cost rates for functions like house construction or repairs and are sometimes secured. The deposits deployed by Nidhi corporations don’t seem to be lots of as compared to the organized banking sector.
Since Nidhi Companies return beneath one class of NBFCs, tally is scepter to issue directions to them in matters with relation to their deposit acceptance activities. However, in recognition of the actual proven fact that these Nidhi corporations wound their shareholder-members entirely;
RBI has exempted the notified Nidhi Companies from the core provisions of the tally Act and completely different directions applicable to NBFCs.