In India company registered under companies act 2013 in the form of Nidhi Company is formed solely for the purpose of cultivating the habit of thrift and saving among its members Nidhi companies are allowed to take deposit from its members and lend to its members only. Therefore, the funds in the nidhi company are solely for the benefits of members, nidhi company accepts deposits from its members and lends to its members.
Nidhi company is a kind of NBFCs and RBI has got the power to issue directions in matters relating to their acceptance of deposits and lending activities. However, RBI has exempted some Nidhi companies from the core provisions of the RBI Act and other directions applicable to NBFCs. Therefore, Nidhi Company is an ideal entity to take deposit from and lend to a specific group of people. For to run a company as a nidhi company firstly it must be formed as a public limited company. The activities of nidhi company fall under the perview of reserve bank of india. Nidhi company is also governed by Rule 6 of Nidhi Rules-2014.
The prime objective of forming a nidhi company in its memorandum of association should be to cultivate the habits of thrift and saving among its members.