Definition: The Residuary Non-Banking Company is yet another form of a financial institution engaged in the principal business of accepting deposits, under any scheme or arrangement or in any other form and not being asset financing, investment, loan company.
Simply, the Residuary Non-Banking Company primarily deal in accepting deposits in any form and investing these in the approved securities. The operations of such company are regulated by RBI and in addition, to the liquid assets it maintains its investments as per the RBI directions.
According to the Reserve Bank of India, a residuary non-banking company is:
- A financial or a non-banking institution, being a company.
- A company that accepts deposits in a lump sum or installments under any scheme or arrangement such as by way of contributions, or subscriptions, or by a sale of units or certificates or in any other manner.
- A company, which is according to the Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 1977 is not:
- A hire-purchase company
- A housing finance company
- An equipment leasing company
- A mutual benefit company
- A loan company
- An investment company
- An insurance company
- A mutual benefit financial company
- A miscellaneous non-banking company
The Residuary Non-banking company differs from the other non-0banking financial companies in terms of the methods being used in the mobilization of deposits and the requirements of depositors with respect to the funds deployment.