The Nidhi Company is a type of NBFC (Non-Banking Financial Company) which is regulated and governed by the provisions of the Companies Act 2013. The significant feature that differentiates this company from other companies is that this business structure deals with the deposits from and loans to its members, i.e., shareholders only, and works just for the mutual benefits of its members.
Further, it shall be noteworthy to take into consideration that the activities of this business structure do fall under the ambit of Reserve Bank of India (RBI), as it is similar to that of an NBFC. However, RBI has excused the Nidhi Company from the core provisions of the RBI Act, 1934 and other regulations prevalent on an NBFC, as these Companies deals onlywith the money of its shareholders or members.
