Overview
Nidhi company is a type of non-banking financial company (NBFC) in India, which is formed with the objective of cultivating the habit of thrift and savings among its members. Nidhi companies are regulated by the Ministry of Corporate Affairs (MCA) and governed by the Companies Act of 2013.
The main function of a Nidhi company is to provide its members with a platform to save and borrow money from each other. The members of a Nidhi company can be individuals or entities such as trusts, associations, or companies. The company accepts deposits from its members and provides them with loans at a reasonable rate of interest.
Nidhi companies are required to have a minimum of 200 members and maintain a net owned fund of at least Rs. 10 lakhs. They are also required to maintain certain ratios of reserves and investments, and comply with various other rules and regulations set by the MCA.
Nidhi companies are popular in small towns and rural areas of India, as they provide a platform for people to save and borrow money in a convenient and reliable manner.