Understanding the Role of Trustees and Debenture Redemption Reserve in NBFCs
Understanding the Role of Trustees and Debenture Redemption Reserve in NBFCs Non-Banking Financial Companies (NBFCs) have become a critical pillar of India’s financial sector by offering loans, credit facilities, investment opportunities, and wealth management services. To maintain financial discipline and protect investor interests, regulatory mechanisms such as trustees and the Debenture Redemption Reserve (DRR) play an important role in NBFC operations. Whether you are planning for NBFC Registration in India or already hold an NBFC License in India , understanding these two concepts is crucial for compliance and sustainable growth. The Role of Trustees in NBFCs When NBFCs raise funds through debentures, trustees act as independent custodians safeguarding the interests of debenture holders. Key Responsibilities of Trustees: Protect Investor Interests – Trustees ensure that NBFCs fulfill obligations towards investors. Compliance Monitoring – They oversee adherence...
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