The Ministry of Corporate of Affairs has vide amendment dated 18 March 2015, amended the Companies (Share Capital and Debentures) Rules, 2014, to the following effect:
- Now security for the debentures by way of a charge or mortgage can be created in favour of the debenture trustee even by way of pledge.
- Non - Banking Finance Companies can create charge on or mortgage any movable property, as opposed to specified movable properties for other companies, made in favour of a debenture trustee.
- In case of any issue of debentures by a Government company which is fully secured by the guarantee given by the Central Government or one or more State Government or by both, the requirement for creation of charge on specific movable or immovable property in favour of debenture trustees shall not be required.
- The charge or mortgage can be created on a holding company's properties and assets where loan is taken by a subsidiary company from a bank or a financial institution.
- The time period for execution of debenture trust deed by the company issuing debentures in favour of the debenture trustee has been increased from ‘sixty days of allotment of debentures’ to ‘3 months from the date of closure of the issue or offer’.
- The Companies (Share Capital and Debentures) Rules, 2014 are not to apply to Foreign Currency Convertible Bonds issued in accordance with the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 or other directions issued by the Reserve Bank of India (RBI), unless provided in such Scheme or regulations or directions.