Section 150 of the Companies Act, 2013 has provided for Selection of Independent Directors and maintenance of Databank of Independent Directors.

The Ministry of Corporate Affairs has thus vide its notification dated 22nd October, 2019 set forth Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 as substituted on 01st December, 2019.

This rule has two major elementsunderneath it:

  • Online registration of Independent Directors on databank
  • Online proficiency self-assessment test

The Indian Institute of Corporate Affairs (IICA)has to maintain a databank of persons willing and eligible to be appointed as Independent Directors of Companies.

Any person who is willing to register himself on this Databank has to pay fees to the Institute.The fees can be paid for one year, five years or for his life time.Also, Membership is required to be renewed within 30 days from the date of expiry of period upto which the name of the individual was applied for inclusion in the data bank.

Now the Companies can appoint Independent Directors through this online Databank maintained with IICA only. Therefore,the Company is not allowed anymore to appoint any person as Independent Director who is not registered in this Databank.

Post registration in Independent Directors’ Databank, the registered person has to give an Online proficiency self-assessment test. Only after clearing this test conducted by IICA the person is eligible to be appointed as Independent Director.

Any person who scores not less than sixty percent in aggregate in the online proficiency self-assessment test shall be deemed to have passed the test.

Thus, these two are the pre-requisites which need to be complied before appointment of any person as an Independent Director.


The companies who wants to appoint Independent Directors upon their Board can look up for the profiles of Independent Director maintained on the Databank and can conduct internal due-diligence before their appointment.

For availing the services of databank, the Companies also have to pay some nominal fees to the Institute.

Now the big question arises that who can enrol himself as an Independent Director?

  • Any person who is already been appointed as an Independent Director.
  • Any person who intends to get appointed as an Independent Director.
  • Any person who is not holding DIN at the time of registering as Independent Director can also enrol himself as an Independent Director.

Thus, these rules can be seen as quantum leap made by the Ministry of Corporate Affairs towards possession of relevant expertise and experience by the Independent Director of any Company.