Rajya Sabha passes Compnaies Bill,2017

Rajya Sabha passes Compnaies Bill,2017

The Companies Amendment Bill seeks to strengthen corporate governance, initiate action against defaulting firms and improve ease of doing business.

The Companies (Amendment) Bill, 2017 which seeks to bring about major changes in the Companies Act, 2013, was passed by the Rajya Sabha on Tuesday by a voice vote.The bill, which was adopted by the Lok Sabha in July, will now have to receive the assent of the President to become law. The amendment seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country. The Companies Act, 2013 has already been amended once under the current government.

It was passed after much debate in the winter session of the Parliament as members raised concerns about independent directors being allowed up to 10% pecuniary interest in a company.Explaining the changes one could expect, Ankit Singhi, partner at consulting firm Corporate Professionals, said, “The much awaited Companies (Amendment) Bill, 2017 has finally seen the light of the day

The major changes include simplification of the private placement process; rationalization of provisions related to loans to directors; replacing the requirement of approval of the central government for managerial remuneration above prescribed limits by approval through special resolution of shareholders; aligning disclosure requirements in the prospectus with the regulations made by Sebi (Securities and Exchange Board of India); providing for maintenance of register of significant beneficial owners; and making offence for contravention of provisions relating to deposits as non-compoundable.”

Singhi added that the bill, while rationalizing and simplifying certain provisions, also provides for stringent penalties in case of non-filing of balance sheet and annual return every year, which will act as deterrent to shell companies. “This would facilitate ease of doing business, and result in harmonization with Sebi, RBI (Reserve Bank iof India) and rectify certain omissions and in consistencies in the existing Act.”

Replying to issues raised by the members during the discussion, minister of state for corporate affairs P.P. Chaudhary said the amendment would ensure better corporate governance and improve the ease of doing business in the country.

Under the Act, certain classes of profitable companies are required to shell out at least 2% of their three-year annual average net profit towards corporate social responsibility (CSR) activities. In case of non-expenditure, such entities are required to provide reasons for it to the ministry.

R. Ramakrishna of the Bharatiya Janata Party supported passing of the bill and said there was no provision of carrying forward the CSR funds and companies should be given more time to use these funds. He added that the upper limit of 300 days for filing returns under the Act led to non-compliance and hence, changes have been made in the law to improve timely filings

This was opposed by former finance minister P. Chidambaram, who said a company should not give loans to the director or to those of interest to a director.The Standing Committee on Finance had examined the bill and submitted its report on 7 December 2016. In April, the government circulated some amendments to the bill.

The Mint, New Delhi, 20th December 2017

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said. Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm

Credit card spending growth declines on RBI gaze, stress build-up

Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem. “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and

CA Online

Search This Blog