Nidhi Company VS Credit Cooperative Societies
CREDIT COOPERATIVE SOCIETY
An organization that provides services to society is called a credit union. The purpose of these societies is to provide you with financial assistance. Credit unions are primarily responsible for protecting the rights of rural producers and consumers. By eliminating middlemen and making profits in business and trade, they take deposits from members. In addition to housing and personal loans, they also provide vehicle loans at a reasonable interest rate.
There are three credit cooperative societies in particular, which are:-
- Primary Credit Cooperative Society,
- Central Credit Cooperative Society,
- State Credit Cooperative Society
1. Primary Credit Cooperative Society
Primary credit cooperative societies are organizations that act as both borrowers and non-borrowers for a particular locality. The membership of the residents helps in the business affairs of society.
2. Central Credit, Cooperative Society Banks
The members of banking associations that look after the primary resources of societies form the Central Credit Union. The members of Central Cooperative Banks may become part of the credit union.
3. State Credit Co-operative Society Banks
With the help of contributions from wealthy towns people, the State Credit Co-operative Bank Society is established for savings deposits. They are intermediaries between the joint-stock banks and the co-operative societies.
There are major differences between Nidhi Company and credit cooperative societies:-
|SR. NO.||NIDHI COMPANY||CREDIT COOPERATIVE SOCIETY|
|1||NIDHI was established to help its members by providing them with loans at the lowest interest rates.||A credit union is a society that looks after the welfare of society. These societies are there to help you with financial support.|
|2||The main task of the Nidhi company is to promote small savings among its members.||The main task of the credit union is to protect the rights of producers and consumers in rural areas.|
|3||The NIDHI company accepts deposits from its members and later uses them to grant loans to other members.||They acquire deposits from the members of society and eliminate all middlemen who make profits in business and trade.|
|4||Nidhi Company loans shall be made against securities. NIDHI Company shall not offer vehicle loans, unsecured loans of any kind, microfinance – small loans, vehicle finance, personal loans, and hire purchases.||They offer members a home loan, personal loan, or vehicle loan at a low and reasonable interest rate.|
|5||A Nidhi company is a type of company in the Indian non-banking financial sector recognized under Section 406 of the Companies Act, 2013.||The first urban credit union was registered in October 1904 in Canjeevaram (Kanjivaram) in the erstwhile Madras province.|
|6||The Nidhi company is regulated by the MCA (Ministry of Corporate Affairs).||Sections 22 and 23 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies (AACS)) provide the Reserve Bank with regulatory authority over the financial functions of StCBs/DCCBs /UCBs ( credit cooperative societies).|