How to start a gold loan company in just 20 days?


How to start a gold loan company in just 20 days?
Do you Know, India is the largest importer of gold and a household in India possesses the largest gold reserve in the world? Due to this fact only, companies like muthoot finance are growing like beyond optimism and this is the reason why many entrepreneurs, startups were interested in opening up a gold loan company.
However, it is not easy to start a finance company in India due to stricter norms being devised by the mighty Reserve Bank of India (RBI). However, there are still legal ways to do start a gold loan company without RBI approval and that too with just Rs.5 lakh capital.
Nidhi Company – A Gold loan company
All banking and non banking companies engaged in finance business are regulated by the Reserve bank except few companies like Nidhi Company etc. Nidhi Company is an NBFC which can accept deposits and lend money to its members.
Nidhi Company requires only 5 lakh initial capital and seven members to start. It is one of the easiest ways to start a gold loan business.
The main advantage of Nidhi Company is that it can accept deposits from its members and can use that money to lend it further. Nidhi Company is also known as Gold Loan Company, because the most earning of Nidhi Company is from gold loans.
Cost and time for Nidhi company registration
The Nidhi Company registration will cost you around 50 to 55 thousand with 5 lakh capital and takes around 20 days to register.
Nidhi Company at a glance
Here are some basic points about the Nidhi Company which will help you to understand it better:

  • Nidhi Company is a public company which can accept deposits and lends money to its members with RBI approval.
  • Nidhi Company can be registered with just Rs.5 Lakh unlike NBFC which require atleast 5 crore capital.
  • Nidhi Company requires atleast seven members to start with and the entire person may be family members.
  • It can lend gold loan at 20% rate of interest.
  • It can extend the gold loan, property loan and loan against deposits.
  • It can also accept deposits from the public in the form of fixed deposits, recurring deposits and savings deposit which can carry max interest of 12.50%.

Registration of Gold Loan Company – 5 Steps
Now, since you have understood the meaning of Nidhi Company, let us move forward to know the complete procedure for Nidhi Company registration. For simple understanding, we have explained the Nidhi registration procedure in five steps:

  1. Gather all required Documents

Nidhi Company registration procedure is completely online and hence, all the required documents are uploaded to the scan form. Further, it is recommended to submit all required documents to avoid rejection. Here is the list of documents required for Nidhi Company registration:

  • PAN card
  • ID Proof
  • Bank statement, mobile bill, elect bill, landline bill – Anyone

Further, the following additional documents are also required for registered office:

  • Ownership proof/rent agreement
  • Electricity bill
  • Copy of No objection certificate

The above documents should be collected for each of the initial promoters and should be kept in the scan form.

  1. Apply Name approval of the Company

Once the documentation is completed, the next step is to apply for the name approval of the company. Name approval is the important thing because it is the name that describes your company and ultimately becomes your brand and hence, follows the below guidelines for finalizing your company name:

  • The name should be unique and should not match with any existing company name. Check on this link
  • Your proposed name should be not be copied from any registered brand name. Hence, do a proper trademark search under class 36 before finalizing the name.
  • Your name should not be too general like India Nidhi Limited, Money Nidhi Limited, and Best Nidhi Limited etc.
  • The name of the company should be in the following format:

Brand (Prefix)  +  Nidhi (Suffix)  +  Limited
Once your chosen name is approved, the ROC will issue a name approval letter.

  1. File for Nidhi Company incorporation

After getting the name approval letter, the next step is to file for Nidhi Company registration with the MCA. This is the last step in the incorporation process but takes a lot of time, as many new documents are drafted, signed and submitted to the Registrar of Companies (ROC).
If all the documents are found to be ok, then the ROC will issue the Certificate of Registration for Nidhi Company along with PAN and TAN of the Company.

  1. Open the bank account and complete initial compliance

After you got the Nidhi Company registration, now you are all set to start your gold loan business. However, before starting up, you need to setup some things right, so that you can scale on the Nidhi Company operations and gold loans:

  • Open the bank account: Open the bank account with the bank of your choice. You will need the following documents to open the bank account so keep them ready:
    • MOA
    • AOA
    • Certificate of Incorporation
    • Director Pan and ID proof
    • Board resolution


  • Deposit initial capital: Once the bank account is opened, deposit the capital amount of Rs.5 lakh into the bank account to start giving a gold loan to the general public.


  • Print Membership, Loan and deposit forms: To engage customers and complete basic KYC, you will need a loan, deposit form and loan agreement with some other basic stationery. Get it ready.


  1. Setup Nidhi software and Get ready to start

Once you’re ready with basic stationery, set up Nidhi Company software to manage all the accounting and calculations of your clients into a single software. There are many companies offering Nidhi software to manage gold loan and hence, you must check all the features and buy the same.
Once, the software is also installed properly, you are ready to rule the world.
About the Author
CA Paras Mehra is a founder of, a website for registering a company, trademarks, GST and managing business compliances for startups and MSME’s.
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  1. sir,
    i would like to start a Nidhi company. please explain me the advantage and disadvantage of this Nidhi company.
    Thank you.

  2. I want start a gold loan business in rural area of state ODISHA, with small capital.
    If I start business whether banks will provide me loan for lending?
    Kindly tell me the easiest & safety path for start business.
    Mobile- 8763172811

  3. Hello Sir,
    I want start a Niddhi Company for Gold loan business. As far I know Ndidhi company is to lend and accept money within members of Niddhi Company. How can I lend money to public with gold deposit which is against the Niddhi rules. Please guide me.

  4. Sir I like to start a gold loan business. Please send me details . SIR PLEASE HELP ME
    Thanks & Regards

  5. I want start a gold loan business in rural area of state kutch (Gujarat) , with small capital.
    If I start business whether banks will provide me loan for lending?
    Kindly tell me the easiest & safety path for start business.
    No. 8460899942

  6. I have got some ideas about a starting gold loan company. Thank u
    Iam want to speak something about this
    How can i contact u?
    Please call me in 9843218055
    Thank u
    And,it so helpful

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