What is a Nidhi Company?

The legal definition of Nidhi Company is a company incorporated as Nidhi with the object of cultivating the habit of thrift and saving amongst its members receiving deposits from and lending to its members only for their mutual benefit and which complies such rules as are prescribed by the central government for regulation of such class of companies. A Nidhi Company works on three principles, namely:

  • Encouraging the habit of saving and cost-cutting
  • Creation of a Mutual Benefit Deposit
  • Lending deposits as required to members

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