The Central Government recently mandated the Indian Institute of Corporate Affairs (IICA) to create a databank of all independent directors (existing and prospective). An Independent Director is a non-executive director of a company who helps in improving its corporate credibility and governance standards. This write-up talks about the key features of the databank and the process for inclusion in the databank.

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What would the Databank be created by the IICA contain?

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The databank will contain details of both existing independent directors and those eligible to become independent directors. Any person who wishes to be included needs to apply online ( https://www.independentdirectorsdatabank.in ). The timeline for applying is three months from the commencement date (December 1, 2019). Hence, the deadline to apply for inclusion in the databank is February 2020. The inclusion can be for a period of 1 year, 5 years, or for a lifetime. Both the existing independent directors and those willing and eligible to be appointed have to give a proficiency test. The pass percentage for this proficiency test is 60% and there is no cap on the number of attempts.

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Is there an exemption from the proficiency test?

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An individual who has served a period of not less than 10 years either as a director or key managerial personnel in a listed public company or in an unlisted public company having paid-up share capital of INR 10 crore or more shall not be required to pass online proficiency self-assessment test.

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What are the steps involved for inclusion in the databank?

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Step 1:  Irrespective of having/not having a valid Director Identification Number (DIN), an individual seeking inclusion in the data bank needs to create a user account on the MCA portal. The DIN/PAN/Passport are verified post the creation of the user account and the individual will be directed to the IICA portal.

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Step 2:  The individual then receives his/her login credentials and they need to use the same to log into the IICA portal. Once logged in, they need to fill in the requisite information such as personal details, professional qualifications, etc.

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Step 3: After the proper population and the required declarations (to the board and compliance-related) the individual then has to select the privacy option and pay the fee to complete the process.

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Step 4: After registration is completed, the individual will receive a registration certificate from the IICA. This certificate will contain the name, registration number, and the validity of the certificate.

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Is there a provision for renewal of the registration?

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Yes, the individual has to get it renewed within 30 days before the expiry of the registration unless he has opted for lifetime registration. If not renewed his name would be removed from the databank.