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Over 18 lakh director identification numbers go off the roll as 20-day extension on KYC ends

BusinessToday.In     October 8, 2018

The central government has deactivated around 18 lakh director activation numbers (DINs) after the 20-day extended deadline on KYC (Know Your Customer) finally ended on October 5. These accounts, however, can be reactivated after paying a fine of Rs 5,000. The current measure will force the erring companies to take compliance seriously or it could affect their functioning. The step has been taken to curb black money and shell companies. Those barred for failing to comply with the KYC norms will not be able to sign any compliance document on behalf of their company until they furnish these KYC details.

The remaining 14 lakh directors have fulfilled the KYC forms, reported Business Standard, adding that only 3 lakh directors completed their KYC verification during the extended deadline. Providing leeway to the directors who failed to comply with the requirement, the government has allowed directors to submit requisite KYC details by paying a reduced fee of Rs 500 till October 5.

A DIN is a unique number that is allotted to those who are directors on the boards of the registered companies. Last year, the government had barred over 3 lakh directors from holding directorship over their failure to furnish KYC details.

In June, the government asked company directors, including those who were disqualified too, and designated partners in LLPs (limited liability partnerships) to submit their KYC details by furnishing the DIR-3 KYC e-form. The last date for complying with the new norms by way of submitting form 'DIR-3 KYC' without fee ended on September 15. But only around 12.16 lakh directors completed the KYC process till the last date, following which the government deactivated around as many as 21 lakh DINs but later extended the deadline. The ministry had received several complaints regarding glitches in government portal - MCA21 -- for KYC compliance, following which the 20-day extension was provided.

While filling in details in the DIR-3 KYC e-form, directors need to mandatorily enter the unique personal mobile number and personal e-mail ID. The directors of Indian origin are asked to furnish their PAN, Aadhaar, permanent residential address, and their passports. The step has been taken to curb the creation of shell companies and dummy directors. The KYC details will also stop people from fleeing the country in case of any wrongdoing.

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