Nidhi Company

Difference Between Banks and NBFCs

Banks and NBFC (Non-Banking Financial Company) are the key financial intermediaries which offer the same products and services to customers. Finance is the basic requirement of an individual as well as businesses. NBFC is a compliment to the bank because banks alone are not able to serve the requirement of all.

Banks: Banks are the financial institutions which are empowered by the government to do financial activities like to accept deposit, CASA, Grant credit, to manage withdrawals pay interest, to issue cheques, to clear cheques, to provide general services to the clients. Banks are the most famous organizations which controls the whole financial system of the country. Banks help in smooth functioning of the company.

NBFC: NBFC is a company which is registered under the Companies act, 1956 or Companies Act, 2013 and it is under the control of Reserve Bank OF India.

NBFC is not a bank but it is engaged in a lending fund as well as many other activities which are similar to banking like to provide loans and advances, credit facility, saving and various schemes etc. NBFC also provides services to the business corporation like an acquisition of shares, stocks, debentures, bonds and securities issued by the government. It also facilitates service like hire purchase, leasing, venture capital finance, housing finances, insurance, Gold loans etc.

 

 

There are many types of NBFCs.

  • Assets Finance Company
  • Investment Company
  • Loan Company
  • Infrastructure Finance Company
  • NBFC-MFI (Micro Finance Institutions)
  • Hire Purchase Finance Company
  • Mutual Benefit Finance Company or Nidhi Company

 

Difference between Nidhi companies and most of the other companies.

Nidhi companies are NBFCs but they have been exempted from the requirement of registration under section 45-IA of the RBI Act, 1934 subject to certain condition, Nidhi companies are regulated by Ministry of Corporate Affairs, Government of India, companies that do financial business but regulated by other regulators are given specific exemption by the Reserve Bank from its regulatory requirements for avoiding duality of regulation.

It may also be Mentioned that Mortgage Guarantee companies have been Loan notified as Non-Banking financial companies under section 45 1(f) (iii) of the RBI Act, 1934, core investment companies with asset size of less than Rs.100 crore and those with asset size of Rs.100 crore and above but not accessing Public funds are exempted from regulatory with the RBI.

QLTRN Wealth India Nidhi Limited is a Nidhi Company carrying on the business of a non-banking financial institution. It is a nonbanking financial company doing the business of lending and borrowing with its members or shareholders. The company is authorized by its laws to accept deposits from its members under different schemes, from Savings account to term deposits like Fixed Deposit and Recurring Deposit Scheme. The deposit schemes are designed to deliver maximum value to its members.