INVESTMENT OPPORTUNITIES IN INDIA
India has a diverse financial sector that is rapidly expanding, both in terms of established financial services firms’ robust growth and new entrants into the market. Commercial banks, insurance firms, non-banking financial companies, co-operatives, pension funds, mutual funds, and other smaller financial institutions make up the sector. New businesses, such as payment banks, have lately been allowed to be established by the banking regulator, expanding the types of entities that operate in the industry. However, India’s financial sector is primarily a banking sector, with commercial banks accounting for more than 64% of the financial system’s total assets.
The Indian government has implemented a number of reforms to liberalise, regulate, and improve this business. The government and the Reserve Bank of India (RBI) have made a number of steps to make it easier for Micro, Small, and Medium Enterprises (MSMEs) to obtain financing (MSMEs). These initiatives include establishing a Micro Units Development and Refinance Agency, establishing a Credit Guarantee Fund Scheme for MSMEs, releasing guidelines to banks about collateral requirements, and establishing a Credit Guarantee Fund Scheme for MSMEs (MUDRA). India is unquestionably one of the world’s most lively capital markets, thanks to a concerted effort from the government and the business sector.
In India a person can enter into financial market through many form of business like;
- Nidhi Company
- Non Banking Financial Company
- Full Fledge Money Changer
- Payment wallet
- Asset Reconstruction Company
- Collective investment scheme
- Merchant Banking
- Micro Finance company
- Alternate Investment fund
- Infrastructure Investment Fund
Nidhi Company
A company which has the object of cultivating the habit of thrift & savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with such rules as are prescribed by the Central Govt.
RBI is empowered to issue directions on Nidhi Company in matters relating to their deposits acceptance activities. However, RBI has exempted the notified Nidhis from the core provisions of the RBI Act and other directions applicable to NBFCs. Nidhi Company is an ideal entity to take a deposit from and lend to a specific group of people.
Benefits
- No RBI Regulation
By its nature of the activity, Nidhi Company falls under the NBFC category but does not require approval from RBI. These companies obey Nidhi Laws, released in 2014 with respect to the company’s operation and function. RBI has exempted Nidhi Company from observing strict compliances, so you don’t have to be in a rush-n-hush as RBI won’t bother if you start a Nidhi Company in India.
- Can easily lend and borrow funds fund from its member
The main objective of Nidhi company is to promote the habit of saving amongst its member which means it is certain and going concern business as the members will not stop savings anytime.
- Low rate of interest
One can borrow money as a member at a minimum rate, compared to the rate at which banks lend money. This can be a big advantage in times of need, as different individuals in the mutual benefit society would probably need funds at different times.
- Encourage Saving
It encourages all its members to save money and encourages a sparing lifestyle. After all, a Nidhi Company is a mutual benefit society in which members can lend or borrow money, and accept financial assistance among themselves.
For Operating this business you need to incorporate a company under company’s act 2013 with objective of cultivating the habit of thrift & savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with such rules as are prescribed by the Central Govt.
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