APPOINTMENT DATE FOR SECTION 23 AND 45 COMPANIES (AMENDMENT) ACT, 2020

 COMPANIES (AMENDMENT) ACT, 2020

Section 124 (7) of the Companies Act, 2013 provides penalty if a company fails to comply with the provisions of section 124 (unpaid dividend).  The original penalty on the company is - penalty which shall not be less than Rs.5 lakhs but which may extend to Rs.25 lakhs.  Officer-in-default shall be imposed penalty not less than Rs.1 lakh but which may extend to Rs.5 lakhs.

Section 23 of Companies (Amendment) Act, 2020 caused an amendment to section 127(7) and substituted a new provision to section 127(7).  The penalty is reduced by amendment.  The new penalty is Rs.1 lakh.  If the offence is a continuous one, a further penalty of Rs.100/- for each day subject to a maximum of Rs.10 lakhs.  The officer in default is liable to a fine of Rs.25,000/-; if the offence is a continuous one, a further penalty of Rs.100/- for each day subject to a maximum of Rs.2 lakhs.

Section 23 which amends section 124(7) of the Companies Act came into effect from 24.03.2021.

Section 45 of Companies (Amendment) Act, 2020 substitutes the penalty imposed under section 247 for the Registered Valuer contravening the provisions of section 247 and the rules made there under.  The penalty imposed on registered valuer is not less than Rs.25,000/- but may be extended to Rs.1 lakhs.

The amendment reduces the penalty.  The new penalty amount is Rs.50,000/-

Section 45 which amends section 247(3) of the Companies Act came into effect from 24.03.2021.

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Extension of Cheque Truncation System (CTS) across all bank branches in the country

 The CTS is in use since 2010 and presently covers around 1,50,000 branches. All the erstwhile 1219 non-CTS clearing houses (ECCS centres) have been migrated to CTS effective September 2020. It is, however, seen that there are branches of banks that are outside any formal clearing arrangement and their customers face hardships due to longer time taken and cost involved in collection of cheques presented by them.

To leverage the availability of CTS and provide uniform customer experience irrespective of location of her/his bank branch, it has been decided to extend CTS across all bank branches in the country. To facilitate this, banks shall have to ensure that all their branches participate in image-based CTS under respective grids by September 30, 2021. They are free to adopt a model of their choice, like deploying suitable infrastructure in every branch or following a hub & spoke model, etc. and concerned banks shall coordinate with the respective Regional Offices of RBI to operationalise this.

Banks are advised to inform RBI (helpdpss@rbi.org.in) the roadmap to achieve pan India coverage of CTS and submit a status report before April 30, 2021.

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