1. Nature of Business

• A Nidhi Company is a mutual benefit organization focusing only on its members.
  
• It accepts deposits and provides loans only to and from its members.
  
• A Non-Banking Financial Company (NBFC) offers financial services to the general public.
  
• NBFCs engage in various financial activities like loans, leasing, and investments.
  
• NBFCs operate on a commercial scale, whereas Nidhi Companies promote member welfare.
  

2. Regulatory Authority

• Nidhi Companies are regulated by the Ministry of Corporate Affairs (MCA).
  
• They are governed under the Companies Act, 2013, and the Nidhi Rules, 2014.
  
• NBFCs are regulated by the Reserve Bank of India (RBI).
  
• NBFCs follow RBI’s guidelines on capital adequacy, asset classification, and provisioning.
  
• Nidhi Companies have limited RBI involvement due to their restricted scope.
  

3. Membership and Customer Base

• Nidhi Companies serve only their registered members.
  
• Membership is compulsory for availing deposit or loan facilities.
  
• NBFCs serve the general public and offer services to both individuals and businesses.
  
• There is no requirement for clients to become members of NBFCs.
  
• Nidhi Companies are more community-focused, while NBFCs are market-oriented.
  

4. Permissible Activities

• Nidhi Companies are restricted to accepting deposits and granting loans among members.
  
• They cannot engage in leasing, insurance, chit funds, or stock market activities.
  
• NBFCs have broader operational freedom in offering various financial products.
  
• NBFCs can offer personal loans, vehicle finance, microfinance, and investment services.
  
• Nidhi Companies must strictly adhere to the mutual benefit structure.
  

5. Capital and Compliance Requirements

• Nidhi Companies require a minimum paid-up equity capital of ₹5 lakhs at registration.
  
• They must achieve ₹10 lakhs Net Owned Fund within one year.
  
• NBFCs require a minimum net owned fund of ₹2 crores and RBI registration.
  
• NBFCs face more complex and stringent compliance standards.
  
• Nidhi Companies follow simpler regulatory procedures with fewer financial disclosures.