Rules explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Databank Rules, 2019 turn section 150 of the Companies Act, 2013 into practice. They tell the institute how to build and keep the online databank of persons willing and eligible to be appointed as independent directors, what it must test and teach, who approves the course material, and what it must report every year. This article is as amended up to G.S.R. 580(E) dated 19 August 2021 per the MCA e-book. Later amendments should be checked before you rely on it. If you are looking for an independent director, see our appointment of director service.
The institute, the Indian Institute of Corporate Affairs, keeps an online databank on its website of persons willing and eligible to be independent directors, with the particulars in rule 3(2). Information goes only to companies required to appoint an independent director, on a reasonable fee. The institute conducts the online proficiency self-assessment test and shares study material, a panel of not more than ten members approves the course outline, and the institute sends an annual report within sixty days of each financial year-end.
Rule 1: short title and commencement
The rules may be called the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. They were notified on 22 October 2019 as G.S.R. 805(E) under section 150 read with section 469. Rules 2 and 5 came into force on the date of publication, and the rest from 1 December 2019.
Rule 2: definitions
"Act" means the Companies Act, 2013, and "institute" means the Indian Institute of Corporate Affairs notified under section 150(1) of the Act. Other words take their meaning from the Act.
Rule 3: the databank
Rule 3(1): creation
The institute must create and maintain a databank of persons willing and eligible to be appointed as independent directors. It is an online databank on the institute's website. The Explanation says this includes individuals already serving as independent directors.
Rule 3(2): what it contains
For each person, the databank holds: (a) DIN, if applicable; (b) income tax PAN; (c) name and surname in full; (d) father's name; (e) date of birth; (f) gender; (g) nationality; (h) occupation; (i) full address with PIN code (present and permanent); (j) phone number; (k) e-mail id; (l) educational and professional qualifications; (m) experience or expertise, if any; (n) any pending criminal proceedings as specified in section 164(1)(d); (o) the list of limited liability partnerships in which he is or was a designated partner, with name, nature of industry and duration with dates; and (p) the list of companies in which he is or was a director, with name, nature of industry, nature of directorship (executive, non-executive, managing director, independent or nominee) and duration with dates.
Rule 3(3) to (8): access, privacy, changes and fees
| Sub-rule | Provision |
|---|---|
| 3(3) | The information is provided only to companies required to appoint an independent director, after paying a reasonable fee to the institute |
| 3(4) | A person included may restrict his personal information from being disclosed in the databank |
| 3(5) | A person in the databank must make changes in his particulars within thirty days of the change, through the institute's web-based framework |
| 3(6) | A disclaimer must be conspicuously displayed on the databank website that a company must carry out its own due diligence before appointing anyone as independent director |
| 3(7) | The institute fixes, with the prior approval of the Central Government, a reasonable fee from individuals for inclusion or renewal and from companies for information |
| 3(8) | On delay in applying for inclusion or renewal, the institute allows it under rule 6 of the Directors Rules, 2014 after charging a further fee of one thousand rupees on account of the delay |
Sub-rule (8) and the words "or renewal" in sub-rule (7) were inserted in 2021. The person's side of the process, including the renewal period and the test, is in our article on rules 5 and 6 of the Directors Rules.
Rule 4: duties of the institute
For the individuals referred to in rule 6(1) of the Directors Rules, 2014, the institute must:
- conduct an online proficiency self-assessment test covering companies law, securities law, basic accountancy and other areas relevant to the functioning of an independent director;
- prepare basic study material and online lessons, including audio-visuals, for those taking the test;
- provide an option for advanced tests in those areas, with the necessary advanced study material.
A proviso says no separate fee may be charged by the institute for these three items.
Rule 4(2) requires the institute to share with the Central Government, daily, a cumulative list of individuals (a) whose names have been included, with the date of inclusion and their income tax PAN or passport number for a foreign director not required to have a PAN; (b) whose applications for inclusion were rejected, with grounds and dates; and (c) whose names were removed, with grounds and dates.
Rule 5: the panel
A panel of not more than ten members nominated by the Central Government approves the outline of courses and study material prepared by the institute. It consists of: (a) the Secretary, Ministry of Corporate Affairs, or his nominee; (b) the Director General and Chief Executive Officer of the institute or his nominee; (c) one member nominated by the Department of Economic Affairs; (d) one member nominated by the Department of Public Enterprises; (e) one member nominated by the Securities and Exchange Board of India; (f) at least one representative from the stock exchange nominated by the Central Government; (g) at least one representative from industry; and (h) at least one representative from academia, both nominated by the Central Government.
Rule 6: the annual capacity-building report
Inserted in 2021, rule 6 requires the institute, within sixty days from the end of every financial year, to send an annual report to every individual whose name is in the databank and also to every company in which such individual is an independent director, in the format in the Schedule. The Schedule is headed "Annual Report on Capacity Building of Independent Director (To be submitted by the institute)". It records the director's name, DIN, databank registration number, subscription (one year, five years or lifetime), membership validity and test status ("N.A if exempted"), and then two tables: (A) participation during the financial year and (B) total participation, each across e-learning modules, other training programmes or courses, and colloquia, workshops or events, showing the number released or organised by the institute and the number completed or attended by the person.
At a glance
| Rule | Subject |
|---|---|
| 1 | Short title; commencement on 1 December 2019 (rules 2 and 5 on publication) |
| 2 | Definitions; the institute is the Indian Institute of Corporate Affairs |
| 3 | The databank, its contents, access, privacy, changes and fees |
| 4 | Duties of the institute: test, study material, advanced tests, daily list |
| 5 | The panel of not more than ten members |
| 6 | Annual report within sixty days of the financial year-end |
A worked example
Mr. Vivek Rao is already an independent director of two companies. His particulars sit in the databank, with his qualifications and the list of companies where he has served. He changes his residential address and updates the databank within thirty days. A company looking to appoint an independent director pays the institute's fee and receives the information, but sees only what Mr. Rao has not restricted. Sixty days after the financial year-end, the institute sends him and each of his two companies the annual report on his e-learning modules, courses and events, in the Schedule's format.
The Act-side provision is in section 150 of the Companies Act, 2013, and the number of independent directors is in our article on rule 4 of the Directors Rules.
Need help with an independent director?
Registering a person in the databank, tracking the proficiency test and checking the company's own due diligence take time. Our appointment of director team can handle the databank steps and the Board paperwork for an independent director's appointment.
Key takeaways
- The Indian Institute of Corporate Affairs keeps the online databank of persons willing and eligible to be independent directors.
- Information goes only to companies that must appoint an independent director, on payment of a reasonable fee; a person may restrict personal information.
- Changes in particulars must be made within thirty days; delay in inclusion or renewal attracts a further fee of one thousand rupees.
- The institute runs the proficiency test and study material without separate fee, and a panel of not more than ten approves the course outline.
- An annual report goes to each person and company within sixty days of the financial year-end.
Read next
- Rules 5 and 6: independent director qualifications and the proficiency test
- Rules 1, 2 and 4: number of independent directors
- Section 150 of the Companies Act, 2013: independent director databank
- Proficiency test exemption: five categories of prior service
Disclaimer: Based on the Companies Act, 2013 rules (and the Companies (Auditor's Report) Order, 2020) named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.