MCA Amendment - Companies (Meeting of Board and its Powers) Amendment Rules 2025

Summary of the Notification and Public Notice

1. Background

The Companies (Meetings of Board and its Powers) Rules, 2014 (“the Rules”) currently exempt RBI-registered NBFCs engaged in ordinary lending/guarantee activities from much of Section 186 of the Companies Act, 2013 (which governs loans and investments by a company), subject only to the limits in sub-section (1).
The International Financial Services Centres Authority (IFSCA) requested a parallel exemption for “Finance Companies” registered in IFSCs, to streamline their board approval requirements and foster ease of doing business.

2. Amendment Made

Rule 11(2) Inserted
- The phrase “shall include” in Rule 11(2) is renumbered as sub-clause (i).
- A new sub-clause (ii) is added, extending the same Section 186 relief to IFSCA-registered Finance Companies that, in the ordinary course of business, undertake any of the following activities as per IFSCA (Finance Company) Regulations, 2021:
  - Lending (loans, commitments, guarantees)
  - Credit enhancement
  - Securitisation
  - Financial leasing
  - Sale and purchase of loan portfolios
  - Operation as a Global or Regional Corporate Treasury Centre
Citation and Enforcement
- Notification No. G.S.R.(E) dated June 2025, issued under sections 173, 177, 178, 186 & 469 of the Companies Act, 2013.
- Effective upon publication in the Official Gazette.

3. Public Consultation

A draft of this amendment has been published on the Ministry’s e-Consultation portal (www.mca.gov.in).
Stakeholders may submit suggestions and brief justifications by 17 July 2025.

Implications and Next Steps

For IFSCA-Registered Finance Companies
- Board approvals for loans/investments within prescribed thresholds will now mirror the relaxed framework available to RBI-registered NBFCs.
- This reduces procedural delays, allowing quicker deployment of credit and treasury services.
For Corporate Secretaries & Legal Teams
- Update internal Board Governance manuals to reflect the new sub-rule (ii) under Rule 11(2).
- Monitor the MCA’s e-Consultation portal for any stakeholder feedback and final notification.
For Other Stakeholders
- Entities operating in IFSCs but not registered with IFSCA should assess whether they qualify under these amended rules.
- Non-Finance Company entities (e.g., banks, technology firms) remain subject to existing Section 186 requirements.

Call to Action

Submit Feedback: Use the MCA’s online module to help shape the final text by 17 July 2025.
Review Corporate Policies: Ensure your board charters and delegated authorities are aligned with both the old and newly expanded exemptions.

Further Reading