Introduction

The Reserve Bank of India (the Bank), having considered it necessary in the public interest and being satisfied that for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to give the directions set out below, in exercise of the powers conferred by sections 453, 451 A and 45 K of the Reserve Bank of India Act, 1934 (Act 2 of 1934) (the RBI Act), and of all the powers enabling it in this behalf, and in super session of the earlier Directions contained in Notification No. DFC.55/DG(O)-87 dated the 15th May 1987 as amended from time to time issues the following deposits Residuary Non-Banking Companies (Reserve Bank) Directions, 2016 (the Directions applicable to every Residuary Non-Banking Company hereinafter specified.

Acceptance of deposits

On and from April 12, 1993 no residuary non-banking company can receive any deposit repayable on demand or on notice or after a period of less than 12 months or more than 84 months from the date of receipt of such deposit, or renew any deposit received by it whether before or after that date, unless such deposit, on renewal, is repayable not earlier than 12 months and not later than 84 months from the date of such renewal. Where a deposit is received in installments, the period of deposit should be computed from the date of receipt of the first installment.

No processing or maintenance charges

No residuary non-banking company shall take from any depositor or any subscriber to any schemes run by the residuary non-banking company registration in madurai any amounts towards processing or maintenance charges or any other charges by whatever name called for meeting such companies’ revenue expenditure. Residuary non-banking companies may charge to a new depositor / subscriber a one time (non-refundable) sum not exceeding Rs. 80/- (Rupees eighty only) towards the cost of expenses for issuing brochure, application form and servicing the depositor’s account where the aggregate yearly subscription of such deposit is not less than Rs. 500/- Where the amount of deposit collected is less than Rs. 500/- there shall be a pro rata reduction in the said one time non-refundable amount of Rs. 80/-No such amount shall be collected on the deposits received under daily deposit scheme.

Branches and appointment of agents to collect deposits

No residuary non-banking company shall open its branch/office or appoint agents to collect deposits except as provided here under:

(i) a residuary non-banking company having the certificate of registration issued under section 45-IA of the Act, may open its branch or appoint agents if its-

(a) NOF is up to Rs. 50 crore within the State where its registered office is situated; and if

(b) NOF is more than Rs. 50 crore anywhere in India

(ii) (a) for the purpose of opening a branch / office, a residuary non-banking company shall notify to the Bank of its intention to open the proposed branch;

(b) on receipt of such advice, the Bank may, on being satisfied that in the public interest or in the interest of the concerned residuary non-banking company or for any other relevant reasons to be recorded, reject the proposal and communicate the same to the residuary non-banking company;

(c) if no advice of rejection of the proposal under (b) above is communicated by the Bank within 30 days from the receipt of such advice, the residuary non-banking company may proceed with its proposal.

Payment of interest for delayed repayment of public deposits

Where an RNBC fails to repay the deposit along with interest on maturity on the claim made by the depositor, it has to pay interest in the following manner:

(i) if the company registration in madurai has intimated about the maturity to the depositor at least two months before the date of maturity and has sufficient evidence for the same, viz., acknowledgement from the depositor, but the depositor fails to submit his claim on maturity then the company will be required to pay interest at the rate as applicable to the deposit from the date of claim till the date of repayment along with the amount due on maturity.

(ii) if the company has not intimated about the maturity to the depositor two months before the date of maturity, then, as and when the depositor makes a claim, the company will be required to pay interest at the rate as applicable to the deposit from the date of maturity till the date of repayment along with the amount due on maturity.

Security for depositors

Every residuary non-banking company (RNBC) on and from April 1, 2006 must invest and continue to invest an amount including the amount invested in assets under Section 45-IB of the Reserve Bank of India Act, 1934, which at the close of business on any day of the quarter ending December 31, 2005 and thereafter, on any day of each quarter shall not be less than the aggregate amounts of the liabilities to the depositors, outstanding at the close of business on the last working day of the second preceding quarter (whether or not such amounts have become payable) in securities or in other types of investments which are unencumbered and valued at a price not exceeding the current market price, in the following manner, namely,-

a) not less than 10 per cent of the aggregate amount of liabilities to depositors in fixed deposits/ certificates of deposit of scheduled commercial banks; or in certificates of deposit of specified financial institutions, provided the certificates are rated not less than AA+ or its equivalent by an approved credit rating agency, or partly in any of these Fixed Deposits/Certificates of Deposit so rated;

b) not less than 75 per cent of the aggregate amount of liabilities to depositors in securities of any State Government or Central Government issued by them in the course of their market borrowing programme, or in bonds or debentures (rated not less than AA+ or equivalent by an approved credit rating agency and listed on a recognized stock exchange) of any other company incorporated under the Companies Act, 1956 (1 of 1956) or in the manner at clause (a) or in the debt oriented schemes of mutual funds subject, however, to the conditions that:-

 (i) Not less than 15 per cent of the aggregate amount of the liabilities to the depositors shall be invested in any securities of any State Government or Central Government issued in the course of market borrowing program;

(ii) Not more than two percent of the aggregate amount of the liabilities to the depositors shall be invested in any one debt oriented Mutual Fund which is governed by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and the aggregate of such investment shall not exceed ten per cent of the aggregate amount of liabilities to the depositors.

Application form of deposits

Every residuary non-banking company should not accept, renew or convert any deposit except on a written application from the depositor. Such a form will be supplied by the company to the depositor and must contain all the particulars specified in Non-Banking Financial Companies and Miscellaneous Non-Banking (Advertisement) Rules, 1977. The said application form should also contain full details about the return which a depositor is entitled to get on the deposits made by him.

Receipts of Deposits

Receipt for every deposit should be furnished to the depositor or his agent by the RNBC duly signed by an officer of it who is entitled to act for the company. The said receipt should mention date of deposit, name of depositor, the amount of deposit both in words and figures, the date of repayment and rate of interest, bonus, premium or other advantage payable thereon.

Register of Deposits

Every residuary non-banking company should keep one or more registers of deposits in which certain specific details should be separately entered for each depositor. They are the following:

(1) Name and address of the depositor.

(2) Date and amount of each deposit.

(3) Duration and due date of each deposit.

(4) Date and amount of accrued interest, bonus or premium or other advantage on each deposit.

(5) Date and amount of each repayment.

(6) Any other particulars relating to the deposit.

This register or registers aforesaid should be kept at the registered office of the company and preserved in good order for 8 calendar years following the financial year in which the latest entry is made of the repayment or renewal of any deposit of which particulars are contained in the register. Every residuary non-banking company shall maintain separate books of account and registers with respect to deposit received / to be received or by sale of units or certificates or other instruments after the commencement of these Directions. If this register is kept at any place other than the registered office under section 209(1) of the Companies Act, 1956 then a copy the notice filed with the Registrar of Companies should also be delivered to the Reserve Bank of India within 7 days of such filing.