Nidhi Company is a company registered under the Companies Act, 2013, which is incorporated with the sole objective of encouraging and cultivating the habit of savings amongst its members. Its only objective is to accept deposits and lend money in between its members.
A Nidhi company Registration is a Public Company doing limited financial transactions between its members confined in territorial restrictions. It is regulated by the Ministry of Corporate Affairs under section 406 of the Companies Act, 2013. The Nidhi Company is exempted from the core of the directions and regulations of the Reserve Bank of India Act, 1934 regardless of accepting deposit and lending business.
It is allowed to accept deposits from its members and lend to its members only. Hence, the funds that are contributed to Nidhi company are only from its members and used only by its members.
What are the Main Objectives of Nidhi Bank Registration?
If you are planning to start a Nidhi bank registration, it is essential to register it with the Ministry of Corporate Affairs. The registration process is straightforward, and it is necessary to comply with the rules and regulations set by the government. In this section, we will discuss the main objectives of and why it is essential for your business.
Similar to banks, a Nidhi Company has a right to open Saving Accounts of its members in order to promote and encourage the habit of saving among members.
- Ease of Fund
Just like banks a Nidhi Company can also raise funds. Nidhi Company Registration is the safest way to raise funds from the general public (just by registering them as members) through deposits, RDs (recurring deposits), and FDs (fixed deposits).
Nidhi Company is allowed to lend money to its members only. However, they can provide only secured loans to their members.
- Micro Banking
There are many remote areas which still devoid of nationalized banks and NBFCs. Nidhi Company is the solution to this, as it can provide rural banking services to these locations.