A Nidhi Company is a type of Non Banking Financial Company. Section 406 of the Companies Act, 2013 provides for the provisions related to governing of a Nidhi Company. Similar to a Bank, the core business activity of a Nidhi Company is to borrow money from it’s members and lend money to it’s other willing members. A Nidhi company cannot borrow and lend to individuals who are not it’s members. Nidhi Companies are also called as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. A Nidhi Company does not require RBI approval or permissions as in case of other Non-banking Financial Companies. However, at all times it has to follow and comply with the provisions and guidelines of Companies Act, 2103 as well as Notification and guidelines issues by Reserve bank of India from time to time. Nidhi Rules, 2014 provide for the rules to be followed by a Nidhi Company. A Nidhi Company once incorporated, shall ensure to have at least 200 members within 1 year from it’s incorporation.