Independent Directors Databank (IICA) — Registration, Fees, and the Proficiency Self-Assessment Test
Every individual who is serving, has been appointed, or intends to be appointed as an independent director of an Indian company is required to get their name included in the Independent Directors Databank maintained by the Indian Institute of Corporate Affairs (IICA). This is a distinct, often-missed compliance step separate from DIN allotment or KYC — a person can hold a valid DIN and still be non-compliant if their name is not on the databank, or if they have not cleared the proficiency test within the prescribed window. Non-registration, or lapsing off the databank, does not by itself vacate an existing directorship, but it does put the appointment and the company’s own governance compliance at risk, and is routinely checked in due diligence and secretarial audit.
Legal Basis
The requirement flows from Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, operationalised through the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. IICA was designated by the Ministry of Corporate Affairs to create and maintain the databank, and it operates the portal at independentdirectorsdatabank.in.
Who Must Register
- Every individual who is currently serving as an independent director on the board of any company.
- Every individual who proposes to be appointed as an independent director.
- Existing independent directors, even those who already hold a DIN and are already on a company’s board, if their name is not yet on the databank.
Registration is individual-specific and portable — it is not tied to a single company, so a person serving on multiple boards registers once.
Timeline for Registration
An individual who is appointed as an independent director must apply for inclusion of their name in the databank within three months of the date of appointment (extended to five months by the amendment effective 28 February 2020, for the specific relaxation window notified at the time — practitioners should always check the current MCA circular for the operative period, as this timeline has been extended more than once in response to portal transition issues). Companies onboarding a new independent director should build databank registration into the appointment checklist alongside DIN and consent filings, rather than treating it as a formality to be done later.
Fee Structure
The fee is paid directly on the IICA databank portal by the individual, based on the tenure of registration selected:
| Registration Tenure | Fee (excl. GST) | Fee (incl. 18% GST) |
|---|---|---|
| 1 year | ₹5,000 | ₹5,900 |
| 5 years | ₹15,000 | ₹17,700 |
| Lifetime | ₹25,000 | ₹29,500 |
Delay fee: where an individual applies for inclusion, or for renewal, after the prescribed timeline, IICA charges an additional ₹1,000 delay fee on top of the applicable tenure fee.
Fee amounts are set by IICA and have been revised in the past — always confirm the current figure on the portal before advising a client, since these numbers are not fixed by the Rules themselves.
The Online Proficiency Self-Assessment Test
Every individual whose name is included in the databank must pass IICA’s Online Proficiency Self-Assessment Test within a specified period from the date of inclusion of their name (currently two years, subject to periodic relaxation by MCA/IICA circulars), failing which their name is liable to be removed from the databank.
Format:
| Parameter | Detail |
|---|---|
| Question type | Multiple choice |
| Number of questions | 50 |
| Duration | 75 minutes |
| Passing threshold | 50% |
| Attempts | Unlimited (can be reattempted until cleared) |
| Subject coverage | Company law, securities law, basic accountancy, corporate governance |
Who Is Exempt from the Test
An individual is not required to pass the proficiency self-assessment test if, as on the date of inclusion of their name in the databank, they have served for a total period of not less than three years (whether continuously or on an aggregate basis, in one or more companies) as a director or key managerial personnel in any of the following categories of “qualifying entities”:
- A listed public company; or
- An unlisted public company with a paid-up share capital of ₹10 crore or more; or
- A body corporate (listed or unlisted) with a paid-up share capital of ₹10 crore or more, or a turnover of ₹50 crore or more.
This experience-based exemption is the single most useful screening question when advising a prospective independent director — a candidate with a long board track record on qualifying entities can often skip the test altogether, while a first-time independent director cannot.
Renewal
Registration on the databank is not perpetual unless the lifetime option is chosen — the 1-year and 5-year tenures lapse and must be renewed before expiry to keep the individual’s name active. A lapsed registration, like a missed initial registration, attracts the ₹1,000 delay fee on renewal.
Practical Checklist
- Confirm the proposed independent director’s DIN is active and KYC (DIR-3 KYC/KYC-WEB) is current — databank registration is a separate, additional step, not a substitute.
- Check whether the individual is already on the databank; if not, register within the prescribed window from the date of appointment.
- Select the tenure (1 year / 5 years / lifetime) based on how long the individual expects to continue serving as an independent director across companies.
- Assess the 3-year qualifying-entity exemption before assuming the proficiency test is mandatory.
- If the test applies, track the completion deadline from the date of inclusion — failure to clear it in time results in removal from the databank.
- For existing independent directors nearing the end of a 1-year or 5-year registration, calendar the renewal date to avoid a lapse and the associated delay fee.
- Note databank status as a standing item in secretarial audit and board evaluation checklists, since it is a personal compliance of the director but a governance exposure for the company.
Key Takeaways
- Databank registration under Rule 6 (Companies (Appointment and Qualification of Directors) Rules, 2014) is separate from DIN allotment and DIR-3 KYC, and applies to every current or prospective independent director.
- Fees are tenure-based (₹5,900 / ₹17,700 / ₹29,500 including GST for 1 year / 5 years / lifetime respectively), with a ₹1,000 delay fee for late registration or renewal.
- The Online Proficiency Self-Assessment Test (50 MCQs, 75 minutes, 50% pass mark, unlimited attempts) must be cleared within the prescribed period after inclusion, unless the individual qualifies for the 3-year experience-based exemption on qualifying entities.
- Registration is individual and portable across companies, but non-lifetime tenures lapse and need timely renewal to avoid removal from the databank.
Source / Further Reading
- Independent Directors Databank Portal (IICA)
- Online Proficiency Self-Assessment Test — IICA
- Companies (Appointment and Qualification of Directors) Rules, 2014 — MCA