Why banking company not required to create drr or dri???
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debenture redemption reserve is a provision that was added to the Indian Companies Act of 1956 during an amendment in the year 2000. The provision states that any Indian company that issues debentures must create a debenture redemption service to protect investors against the possibility of default by the company.
As per the guidelines of Securities and Exchange Board of India i.e. SEBI ,initially the INFRASTRUCTURE COMPANIES along with the companies issuing debentures with a maturity period of not more than 18 months , Government companies were exempted from creating the debenture redemption reserve.
Now, as per the section 71(4) of The Companies Act 2013, it is mandatory for all the companies to create DRR atleast 25% of the debentures issued, except:
All India Financial Institutions regulated by RBI and Banking Companies.For NBFCs registered with RBI , DRR will be value of debenture issued and no DRR is required in case of privately issued debentures.
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As per the guidelines of Securities and Exchange Board of India i.e. SEBI ,initially the INFRASTRUCTURE COMPANIES along with the companies issuing debentures with a maturity period of not more than 18 months , Government companies were exempted from creating the debenture redemption reserve.
Now, as per the section 71(4) of The Companies Act 2013, it is mandatory for all the companies to create DRR atleast 25% of the debentures issued, except:
All India Financial Institutions regulated by RBI and Banking Companies.For NBFCs registered with RBI , DRR will be value of debenture issued and no DRR is required in case of privately issued debentures.
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