Meaning of "Residuary Non-Banking Company"
Residuary Non-Banking Company is one of the category of NBFC, which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner and not being Investment, Asset Financing, Loan Company. These companies are required to maintain investments as per directions of RBI, in addition to liquid assets.
In accordance with the PART II - 2 of Residuary Non-Banking Companies (Reserve Bank) Directions, 1987, every residuary non-banking company
- is a non-banking institution, being a company,
- which receives any deposit under any scheme or arrangement, by whatever name called,
- in one lump-sum or in installments by way of contributions or subscriptions or by sale of units or certificates or other instruments, or in any other manner and
- which, according to the definitions in the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 or, as the case may be, the Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 1977 is not
i) an equipment leasing company;ii) a hire purchase finance company;iii) a housing finance company;iv) an insurance company;v) an investment company;vi) a loan company;vii) a mutual benefit financial company and;viii) a miscellaneous non-banking company;ix) a mutual benefit company.
How is RNBCs different from NBFCs?
The functioning of RNBCs is different from NBFCs in terms of method of mobilisation of deposits and requirement of deployment of depositors' funds as per Directions. Besides, Prudential Norms Directions are applicable to these companies also.