Nidhi companies are created in order to cultivate the habit of savings which is mainly targeted to middle and lower middle class families. This investment structure has realigning funds within a growing group of members who got benefit from returns at fixed durations. The contributions of funds which have been generated in nidhi investments are realized from its members or shareholders. They are mutual benefit societies since their dealings are restricted to its members and the membership is limited. The loans they provide are at reasonable rates and most of the loans are for house constructions or renovations. They are generally secured loans.
Nidhis are come under the class of NBFCs, the role of RBI is to issue the right directions to them in matters relating to their deposit acceptance activities. But, it doesn’t have any specified regulatory framework for nidhis.
Nidhi company registration can be done in Madurai, Coimbatore, Trichy, Tirupur, and Karurexlusively.