Nidhi Company comes from the Hindi word Nidhi which means fund. Nidhi companies are registered under the Companies Act, 2013. These companies can be called a habit of savings between the members of the company. The company consist of investment structure consists of realigning funds within a growing group of the member who benefits from the returns at fixed duration.
Nidhi company is similar to NBFC. It refers to any mutual benefit by Ministry of corporate affairs. These companies have been incorporated with the aim of utilizing money in the best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. Nidhi companies are also called mutual benefit societies because their dealings are restricted only to the members.
According to government law, Nidhi Company is governed by Nidhi rules. These companies are incorporated under the nature of a limited company. These comply with two rules one under Companies Act, 2013 and Nidhi Rules 2014. Nidhi Company provides the benefit of the mutual fund, Permanent fund, etc.