A company engaged in the manufacture of goods accepts deposits of money from the public merely for the purpose of financing its business as a manufacturer. Under the Explanation to Section 5(c) of the Act, such a company is:

The Explanation to Section 5(c) provides that any company engaged in the manufacture of goods or carrying on any trade, which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader, shall not be deemed to transact the business of banking within the meaning of that clause. The crucial element is the purpose of the deposit-taking. Where deposits fund the entity’s own trade rather than onward lending or investment for the public, the activity falls outside “banking.” The Act does not classify such an entity as a non-banking financial company; that categorisation arises under the RBI Act framework, not Section 5(c).