Debenture Redemption Reserve (DRR)

A DRR has to be created for the redemption of all debentures with a maturity period exceeding 18 months equivalent to at least 50 per cent of the amount of issue/redemption before commencement of redemption.

Call and Put Provision

The call/buy-back provision provides an option to the issuing company to redeem the debentures at a specified price before maturity. The call price-may be more than the par face value by usually 5 per cent, the difference being call premium. The put option is a right to the debenture-holder to seek redemption at specified time at predetermined prices.

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