Fi Nominees In Defaulting Firms May Not Have To Quit

In a move that will spare the nominees of financial institutions (FIs) on the boards of defaulting companies from quitting, the department of company affairs (DCA) is planning to exempt them from the provisions of the amended Section 274 of the Companies Act, 1956. This section disqualifies directors of companies defaulting on deposits, debentures and dividends or failing to file returns and annual reports from becoming directors in any other company for five years.