A Nidhi Company is a kind of Non-Banking Financial Company (NBFC). Nidhi Companies are formed to borrow and lend money to its members. It is dependent on the principle of mutual benefit and instils the habit of saving among its members. These companies are more operative in the southern part of India. Public business registration is required under the Nidhi Rules of 2014 for Nidhi Company. There must be a minimum of five lakh INR in paid-up equity share capital. Ending the company's name with “Nidhi Limited” is mandatory. According to the 2013, Companies Act, Nidhi Companies cannot issue preference shares.The Nidhi Company is not treated as a for-profit corporation but rather as a mutual benefit organization whereas NBFCs are required to set up a current account. Nidhi Companies are unable to pay any brokerage fees. Nidhi Companies cannot provide any brokerage or inducement for mobilizing the member's money.A Nidhi Company operates for the benefit of its members. It provides the members an easy way to park their excess funds as deposits with the company. Also, it provides loans to its members whenever they are in need.Nidhi Company is registered under the provisions prescribed in the Companies Act, 2013. The only objective of forming a Nidhi Company is to cultivate the habit of thrift and savings amongst its members. The minimum capital requirement to start a Nidhi Company is Rs. 10 lakh (Increased via Nidhi (Amendment) Rules, 2022.Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, Companies engaged in the business of stock-broking/sub-broking, Venture Capital Fund Companies, Nidhi Companies, Insurance companies and Chit Fund Companies are NBFCs but they have been exempted from the requirement of registration under Section 45 .One such condition is that the company must maintain and continue to maintain a net-owned fund-to-deposit ratio of 1:20 based on its last audited financial statements. This means that a Nidhi company can accept deposits up to a maximum of 20 times its net-owned fundAll the Deposits with Nidhi companies are very much safe as well as secure as the Ministry of Corporate Affairs and the Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits.