A Nidhi Company is a type of non-banking financial company (NBFC) in India, designed to encourage savings among its members. It operates by borrowing and lending money to its members, promoting the habit of thrift and saving. Nidhi Companies are mutual benefit societies, meaning they work for the benefit of their members. Unlike banks, they are restricted from engaging in certain financial activities and serve only their registered members. The primary objective of a Nidhi Company is to cultivate a community-based financial system that provides safe and secure financial services with minimal external interference.