Nidhi Company is one of the category of Non Banking Financial Company (NBFC) which does not require any Reserve Bank of India (RBI) license. Nidhi Company works through its members. It can accept deposits and lends loans to its members only.
The companies doing Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Nidhis are more popular in South India and are highly localized single office institutions.