residuary non banking company

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swati (Querist)
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07 March 2011 Plz anyone tell me what is ' Residuary Non-Banking Company'? Is there any Net Owned Fund ( NOF) required for RNBC ? if Yes, How Much ?, Is Registration mandatory For RNBC ?

Abhishek

Abhishek (Expert)
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08 March 2011 Residuary Non- Banking Companies (RNBC): RNBCs are a class of NBFCs that cannot be classified as equipment leasing company, hire purchase, loan, investment, nidhi or chit fund companies, but which tap public savings by operating various deposit schemes akin to recurring deposit schemes of the Banks. The deposit acceptanceactivities of these companies are governed by the provisions of Residuary Non-Banking Companies (Reserve Bank) Directions 1987. To safeguard the interest of depositors, the RBI has directed RNBCs to invest not less than 80% of aggregate deposit liabilities as per the investment pattern prescribed by it. They can invest only 20% of aggregate liabilities or 10 times of its net worth, whichever is lower in a manner decided by its Board of Directors.
1.18 The RNBCs are the only class of NBFCs for which the floor rate of interest is specified by the RBI and there is no upper limit prescribed for them. The RBI has also prescribed prudential norms for RNBCs which are mandatory and prerequisite for acceptance of deposits.