The Central Government has notified the Companies (Meetings of Board and its Powers) Amendment Rules, 2025, which update the 2014 Rules under the Companies Act, 2013. This amendment revises Rule 11 to clearly define the term “business of financing industrial enterprises” under Section 186(11)(a) of the Act.
For Non-Banking Financial Companies (NBFCs) registered with the Reserve Bank of India, the definition now includes giving loans or providing guarantees or security for loan repayments in the normal course of business. For finance companies registered with the International Financial Services Centres Authority (IFSCA), it includes these activities and other financial services allowed under the IFSCA (Finance Company) Regulations, 2021.
This clarification helps companies, directors, and regulators understand which financial activities Section 186 covers, ensuring smoother compliance and better corporate governance, covers. The amendment brings consistency between the Companies Act and financial regulatory frameworks, strengthening oversight on company loans, guarantees, and investment decisions.