Question

Why it is not necessary for AIFI &Banking companies to maintain DRR.

Answer 1

Dear Student
It is as per Law that All Indian Financial Institutions and banks regulated under RBI are exempted from maintaining DRR and DRI.

The possible reason for it may be that all these Institutions are backed by the government of India and since the government is the law forming body it can and would never default in payment to debenture holders. Therefore government institutions are not required to maintain those reserves and investments.



Regards