Advisory Services
Audit
Consulting
ESG Advisory
RBI Registration
SEBI Registration
IRDA Registration
FEMA Advisory
Compliances
IBC Services
VCFO Services
Growing
Developing
ME-1
ME-2
EU-1
EU-2
SE
Others
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.
Tanya is working as writer & editor from past 2 years with experience in covering startup and technology related topics.
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Infrastructure and real estate have been regarded as India's "sunshine sector" since the turn o...
On 22nd May 2023, the Central Board of Direct Taxes (CBDT)[1] issued a new circular under secti...
Anyone can have different sources of income. With globalization and the opening up of economies...
The Reserve Bank of India (RBI) is crucial in regulating NBFC, including branch openings and cl...
In India, Non-Banking Financial Companies are subject to certain restrictions from taking publi...
Are you human?: 3 + 3 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
RBI has allowed an NBFC with assets size more than 500 Cr to be classified as QIB (Qualified Institutional Buyers),...
23 Jun, 2017
The entire banking sector has been under severe liquidity stress, following the IL&FS bankruptcy along with man...
10 Aug, 2019
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!