Rural Urban Nidhi Limited comes under one class of NBFCs, Reserve Bank of India (RBI) is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that Nidhi deal with their shareholder-members only, Reserve Bank of India (RBI) has exempted the notified Nidhi from the core provisions of the Reserve Bank of India (RBI) Act and other directions applicable to NBFCs. Nidhi in the Indian context / language means "treasure". However, in the Indian financial sector it refers to any mutual benefit society notified by the Central / Union Government as a Nidhi Company. They are created mainly for cultivating the habit of thrift and savings amongst its members. The companies doing Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Nidhi is a mutual benefit society, because their dealings are restricted only to the members; and membership is limited to individuals. The principal source of funds is the contribution from the members. The loans are given to the members at relatively reasonable rates for purposes such as house construction or repairs and are generally secured. The deposits mobilized by Nidhi are not much when compared to the organized banking sector.