It is not mandatory for every company issuing debentures to create a debenture redemption reserve account.

Section 71(4) of the Companies Act, 2013, provides that when debentures are issued by a company under this section, the company is required to create a Debenture Redemption Reserve Account out of the profits of the company available for payment of dividend and the amount credited to such account shall not be utilized by the company except for the redemption of debentures. The provisions for creation of Debenture Redemption Reserve Account (DRR) for various classes of companies as per Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014 are as follows: All India Financial Institutions (AIFIs) regulated by Reserve Bank of India and Banking Companies: No DRR is required for debentures issued by them for both public as well as privately placed debentures. Financial Institutions (FIs) within the meaning of clause (72) of Section 2 of the Companies Act, 2013: DRR shall be as applicable to NBFCs registered with RBI. For NBFCs registered with the RBI under Section 45-IA of the RBI Act, 1934, and for Housing Finance Companies registered with the National Housing Bank: Listed NBFCs and Housing Finance Companies: No DRR is required in case of both public issue of debentures as well as privately placed debentures. Unlisted NBFCs and Housing Finance Companies: No DRR is required in case of privately placed debentures. Listed Companies: No DRR is required in case of both public issue of debentures as well as privately placed debentures. Unlisted companies: Adequacy of DRR shall be 10% of the value of the outstanding debentures. Therefore, Debenture Redemption Reserve is not mandatory for every company issuing Debentures. The statement is true .