What are the privileges of a nidhi company?

What are the privileges of a nidhi company?

Hey there,

Following are the advantages of Registering a Nidhi Company in India:

  • Limited RBI Regulations: Owing to their non-dealing with the funds of any person other than their members, the regulations imposed upon the Nidhi’s by RBI is limited. These companies follow the Nidhi Rules, 2014 issued by the centre in respect of the activities and workings of Nidhi Companies.
  • Limited Capital Requirement: The Ministry of Corporate Affairs has done away with the minimum capital requirement of INR 5 Lakhs for Nidhis. It is only after Nidhi Rules, 2014, that mandated the infusion of INR 10 lakhs for such companies.

Within one year of their incorporation

  • Ease of formation: Unlike other NBFCs, Nidhis don’t have to obtain a license from RBI. They just have to incorporate themselves as a public company with the MCA, infuse the required amount of capital as per Nidhi Rules, 2014 and they are all set to go.
  • Help in channelizing small savings: The main aim of such companies is to promote the habit of saving and thrifts among lower and middle section of the society. These small sections of the population contribute to the funds of and avail credit from Nidhi companies.
  • Lower rate of credit: The loans given to the members are at a lower rate of interest than the market rate. This brings greater savings to the members.
  • No outsider intervention: A Nidhi company is formed by, managed by, and provide benefits to their members only. The outsider is not allowed to intervene into the working of the Nidhis, neither allowed to deposit money or avail credit from these companies.

Hope it will help

Thanks


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