Nidhi comes under the Indian Finance Sector, which represents a mutually beneficial company, incorporated to infuse the habit of saving money or using it carefully, among its members. Nidhi Company is registered as a Public Limited Company under The Company Act 2013 and is governed by Nidhi Rules 2014. The structure formed is such that only its members can contribute towards the and only members can take a loan out of it. This is the main aim of any member opting for such type of a company. The members of such society save and contribute to the funds of the company. This fund is then used to lend, at reasonable rates, to other members. The loans are usually taken for construction/repair of a house, or weddings, etc. The main objectives of Nidhi Company can be to establish a habit of savings among its members and to receive and lend deposits to its members for mutual benefits. It only deals with its members.


  • Under Companies Act 2013, it has to be a public company.
  • It is mandatory to have a minimum equity share capital of Rs 5, 00,000.
  • No issuance of preference shares. If preference shares had been already issued before the commencement of this act, then these shares shall be redeemed as per the terms of the issue of such shares.
  • Its main objective is to establish a habit of savings among its members and to receive and lend deposits to its members for mutual benefits.
  • It must have Nidhi Limited in its name.
  • Every Nidhi Company within a period of one year from the commencement of these rules ensures that it has a membership of 200 people.
  • It will also ensure that its net owned funds are Rs. 10, 00,000 or more.
  • It cannot open a current account with its members.
  • They are not allowed to accept deposits or lend money from any person other than the members.
  • They cannot carry out business other than borrowing or lending.
  • They cannot pledge assets which have been lodged by the members as security.
  • They are not allowed to issue advertisements for deposits.
  • They cannot enter into any partnership agreement for its borrowing or lending activities.
  • They are not allowed to pay any brokerage for granting a loan to its members.


Nbfc (Non-Banking Financial Company) is a type of a company which is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities etc. issued by the government or a local authority or any other marketable securities leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods or providing any services and sale/purchase/construction of immovable property. It is a non-banking institution which is a company and has a principal business of receiving deposits under any scheme or arrangement in one lump sum or in instalments by way of contributions or in any other manner is also a non-banking financial company. NBFC’s have become an important segment under the Indian Financial System. They are regulated by the Reserve bank of India. NBFC’s are a financial institution, which is a company. It is a non-banking institution whose main objective is to receive deposits.


  • The first thing to do is to get registered itself with the RBI.
  • For NBFC incorporation one should have minimum net owned funds of Rs. 200 lakhs.
  • For the registration, one must have to submit the application in the prescribed format along with the documents required by the RBI.
  • After that, RBI will issue the certificate of registration.
  • The NBFC’s can accept deposits from the public only if they are holding a valid certificate of registration.
  • They can accept public deposits for a minimum period of 12 months and for a maximum period of 60 months.
  • Repayment of deposits cannot be guaranteed by RBI.
  • They must compulsorily possess investment grade credit rating.
  • They are not allowed to offer any kind of additional benefit or gifts to the depositors.
  • They cannot accept deposits repayable on demand.


  1. Equipment leasing company: For doing business of leasing equipment or financing for such activities.
  2. Hire purchase Company: For doing business relating to hire purchase transactions.
  3. Loan company: For providing loans or advances.
  4. Investment company: For doing business of buying and selling of securities.


  • Meaning: All business companies in India are classified as Non-Banking Financial Companies or Banking Companies. Nidhi Company is incorporated and thus, it comes under NBFC. They cannot accept deposits from the public nor lend to the public, so they are not completely NBFCs.
  • Functions: Nidhi Company is not allowed to carry the business related to chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by anybody corporate. Whereas, NBFC is a type of a financial institution which does business of loans, advances, acquisition of stocks/shares issued by the Government or local authority, leasing, hire-purchase, insurance business, chit business.
  • Membership: A Nidhi Company cannot add a corporate body as its member and hence taking deposits from such institutions is not allowed. It can only lend or take deposits from its members or shareholders only, so prerequisite before dealing in Nidhi is to become of member of Nidhi. On the other hand, NBFCs can accept public deposits for a minimum time period of 12 months and a maximum time period of 60 months.
  • Advertisement: Nidhi companies are not allowed to advertise for accepting deposits. On the other hand, NBFCs are allowed to advertise their services to accepting or granting loans, deposits etc.
  • Service Charges: A Company does not have the right to charge any member service charge for acquiring membership, issuing of shares for the members is also strictly forbidden. However, Nidhi Company does have the authority to charge processing fees on loans. The interest charged by NBFCs cannot be more than the ceiling prescribed by the Reserve Bank of India.
  • Branches: A Nidhi Company is not allowed to open any branch office until it attains a profit of three years in a row. Whereas, there is no such restriction for NBFCs. They can have their branch opened without any complications.