Direct Tax
Consulting
ESG Advisory
Indirect Tax
Growth Advisory
Internal Audit
BFSI Audit
Industry Audit
Valuation
RBI Services
SEBI Services
IRDA Registration
AML Advisory
IBC Services
NBFC Compliance
IRDA Compliance
Finance & Accounts
Payroll Compliance Services
HR Outsourcing
LPO
Fractional CFO
General Legal
Corporate Law
Debt Recovery
Select Your Location
The Government has removed the Debenture Redemption Reserve, which was required before for Non-Banking Financial Companies {NBFCs}, Housing Finance Companies {HFCs} and Listed Companies. Also, the DRR requirement has been reduced to 10% of the outstanding debentures for Unlisted Companies.
Table of Contents
A Debenture Redemption Reserve {DRR} is a provision which states that any Corporation / Organization that issues debentures must create a Debenture Redemption Service in order to protect the investors from the possibility of default from the company’s side/part.
A debenture is an unsecured loan certificate provided or issued by a company. It is a type of long term loans that a company can take. Normally, it is a type of loan that has to be paid in a specified period of time/date and comes with fixed interest rates.
The Securities and Exchange Board of India[1] {SEBI} have provided certain guidelines regarding Debenture Redemption Reserve. The focal point of these guidelines includes;
The changes that are made are as follows;
Recommended Article: Non-Banking Financial Company vs Micro Finance Institution.
The major reasons for making these changes by the government are as follows;
As an effect of the amendments in the Companies {Share Capital and Debenture} Rules the Listed companies, Non-Banking Financial Companies {NBFCs} and Housing Finance Companies {HFCs} do not need to create Debenture Redemption Reserve in any case, which was mandatory before. The government also reduced the DDR requirement in case of Unlisted companies to 10%, which was 25% before.
Also, Read: Difference Between Banks and NBFCs.
The audit is like a pillar to maintain precision within the business by providing management wi...
The Income Tax Act of 1961 has not defined the term of taxation of expatriates by itself. It ca...
The course of review in the field of the existence of life science and biomedical audit assumes...
The Audit for forex loans given by NBFCs lays out to discover the manifold world of reviewing f...
The amendment on the master directions for credit and debit card issuance, 2022, helps in the e...
Are you human?: 2 + 2 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Compared to other organisations, the corporate governance of Non-Banking Financial Companies is distinct and specia...
07 Jun, 2023
NBFCs Registration is in huge demand post demonetization in India. RBI (Reserve bank of India)[1] also understand...
02 Dec, 2020
Chat on Whatsapp
Hey I'm Suman. Let's Talk!