{"id":17479,"date":"2020-10-07T14:37:29","date_gmt":"2020-10-07T09:07:29","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=17479"},"modified":"2024-10-11T11:30:42","modified_gmt":"2024-10-11T06:00:42","slug":"nidhi-company-cannot-operate-like-nbfc","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/nidhi-company-cannot-operate-like-nbfc\/","title":{"rendered":"Here\u2019s Why NIDHI Company Cannot Operate Like NBFC"},"content":{"rendered":"\n

Nidhi Scheme is a government-based scheme that primarily focuses on setting up a business with less capital. The scheme renders countless benefits to the individual. But there are some exceptions to this scheme that won\u2019t allow the user to do certain things. Anyone willing to associate with such a business model must have detailed knowledge of its down. There is common misconception among many start-ups in India is that Nidhi Company<\/strong><\/a> and NBFC are alike or operates under the same framework. In this blog, we will unfold some key fact regarding these companies. <\/p>\n\n\n\n

Nidhi Company and NBFC may seem like an identical entity but they bear some significant differences. The following section will explain these entities individually. <\/p>\n\n\n\n

Companies<\/a><\/strong> operating under the Nidhi scheme are governed by the MCA i:e Ministry of Corporate Affairs along with the Reserve Bank. This business model advocates a sense of saving amongst people. The source of funding in such a company depends on the contribution of its members. The consolidation of funds in Nidhi companies is typically lower than that of financial institutions like banks.\u00a0<\/p>\n\n\n\n

Read our article<\/b>:NBFC Registration: Step by Step Procedure<\/a><\/mark><\/p>\n\n\n

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\"NIDHI<\/figure><\/div>\n\n\n

Meanwhile, the Non-Banking Financial\nInstitutions (NBFC) are engaged with financing services as they provide quick\nloans to the individual with a nominal interest rate. NBFCs are also involved\nin the business of stock acquisition. NBFCs work complementary to the banking\nsector and primarily focussed on providing client-oriented services. Reserve\nbank is a regulatory authority of Non-Banking Financial Institutions. <\/p>\n\n\n\n

 Nidhi companies serve as the most conducive way to NBFC registration<\/strong><\/a> in India. While NBFCs require a net worth of two crores rupees to operate, Nidhi companies can be established with a capital of just Rs 5 Lakhs. While Nidhi Companies seems advantageous in the same aspects, they possess some downsides as well. <\/p>\n\n\n\n

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