Debenture Redemption Reserve (DRR) requirements in India vary depending on the type of financial institutions and companies. The following categories have specific rules:
Financial Institutions Registered by Reserve Bank of India: All-India financial institutions, as regulated by the Reserve Bank of India (RBI), are exempt from creating a DRR. They have the flexibility to redeem debentures using their capital.
Banking Companies: Banking companies, including those registered with RBI, are also exempt from creating a DRR. They can redeem debentures using their capital.
Non-Banking Financial Companies (NBFCs) Registered with RBI: Similarly, NBFCs registered with RBI enjoy the exemption from establishing a DRR. They can use their capital for debenture redemption.
Housing Finance Companies Registered with the National Housing Bank: Housing finance companies under the oversight of the National Housing Bank (NHB) are exempt from DRR requirements and can utilize their capital for debenture redemption.
Companies Listed on Stock Exchanges: Companies listed on stock exchanges are exempt from DRR obligations and can redeem debentures using their capital.
Unlisted Companies (excluding the above categories): For other unlisted companies, the DRR should be maintained at a level of ten percent of the outstanding debentures' value. |
