Nidhi within the Indian context / language suggests that “TREASURE”. However, within the Indian monetary sector it refers to any mutual profit society notified by the Central / Union Government as a Nidhi Company. They’re created principally for cultivating the habit of thrift and savings amongst its members.
the businesses doing Nidhi business, viz. borrowing from members and loaning to members solely, square measure best-known underneath totally different names like Nidhi, Permanent Fund, profit Funds, Mutual profit Funds and Mutual profit Company.
Nidhi Company square measure additional well-liked in South Republic of India and square measure extremely localized single workplace establishments. They’re mutual profit societies, as a result of their dealings square measure restricted solely to the members; and membership is proscribed to people.
The principal supply of funds is that the contribution from the members. The loans square measure given to the members at comparatively affordable rates for functions like house construction or repairs and square measure usually secured. The deposits mobilized by Nidhi Company aren’t a lot of compared to the organized banking sector.
Since Nidhi Company come back underneath one category of NBFCs, run is scattered to issue directions to them in matters about their deposit acceptance activities. However, in recognition of the very fact that these Nidhi Company take care of their shareholder-members solely, run has exempted the notified Nidhi Company from the core provisions of the run Act and different directions applicable to NBFCs. As on date (February 2013) run doesn’t have any such that regulative framework for Nidhi Company.