A Nidhi company is a type of non-banking finance company recognised under Section 406 of the Companies Act 2013 and governed by the Nidhi Rules, 2014. It borrows and lends exclusively among its own members, on the principle of mutuality, and needs no separate RBI approval to register because the Reserve Bank has specifically exempted this category of NBFC. Regulatory oversight instead sits with the Ministry of Corporate Affairs, which can issue directions on a Nidhi company's deposit-taking activities. About 80% of India's Nidhi companies are located in Tamil Nadu.
Several Nidhi companies run daily-deposit or pigmy-style collection schemes. Nitya Nidhi India Limited advertises a Daily Deposit Scheme, and in Pigmity's own rate table it published the highest rate we found anywhere, 7.00% to 8.00% a year, well above what any bank or co-operative in the same table pays on a comparable product.
That higher rate is exactly why the distinction matters. A Nidhi company is a company under company law, not a bank and not a co-operative society. It falls outside the Reserve Bank's banking supervision and outside DICGC deposit insurance, which covers only state, central and primary co-operative banks. So a Nidhi company's daily-deposit scheme can look identical to a pigmy account at a co-operative bank, same passbook, same collector at the door, while carrying none of the same deposit-insurance protection, whatever its advertised rate.