Independent Director Databank

On December 2nd, 2019, it was announced that the Ministry of Corporate Affairs (“MCA”) has launched a databank of Independent Directors (defined under the Companies Act, 2013). This databank is created pursuant to the provisions of Section 150 of the Companies Act, 2013 (“Act”).

In view of the aforementioned development, we are exploring the related provisions for ease of understanding.

Who is an Independent Director?

An independent director is the one who possesses no pecuniary relationship with the company, and is in no way related to the company or its operations or regular activities like audits. He is not related to any of the affiliates of the company as well. He is a person of integrity and corporate credibility, and guides the company on governance standards functioning as a watchdog, and playing a vital role in risk management. Independent directors play an active role in various committees set up by company to ensure good governance.

Recently, many top management executives of various companies have been in the limelight due to corporate malpractices or irregularities in their roles as directors. The ministry recognizes the importance of independent directors in good governance, and therefore strives to create this database to hold accountable independent directors in their said role.


The provisions with respect to independent directors are applicable to:

  • Listed Companies
  • Public Companies having paid up share capital of one hundred crore rupees or more; or
  • Public Companies having turnover of three hundred crore rupees or more;
  • Public Companies which have, in aggregate, outstanding loans or borrowings or debentures or deposits, exceeding fifty crore rupees.

Independent Director Databank

While the databank has been notified in December 2019 itself, the provisions for the same were enlisted and existing under Section 150 of the said Act. Furthermore, the Ministry has proposed such a databank not only to collate information about Independent Directors, but also train them in discharging of their duties more efficiently.

The repository of independent directors shall be made available to companies who need to appoint one, upon payment of a fee.


Registration for existing independent directors is open on the MCA website, and as per their notification, they must complete registration within 3 months of 1st December, 2019 to avoid any penalties.

Independent directors are also required to pass a basic online proficiency self-assessment test which would be available from March 2020. The test has to be taken within 12 months from registration. 

It is noteworthy that persons willing to become independent directors may also register themselves in this databank, to be chosen by various companies to fill the vacancy for independent directors. 

More information regarding the same is available at and ‘


Companies Act, 2013

Companies (Appointment and Qualification of Directors) Rules, 2014

Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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