“MCA21 e-Gov plan”- Govt planning an overhaul

Indian Govt is contriving to overhaul its “e-Governance program MCA21”

Objective of Overhauling of MCA21: To check corporate frauds.

• Work has been started by the MCA on the fresh version of the program. Key IT companies such as Infosys, TCS and Wipro are anticipated to contend for the mega project. The push is on revamping the MCA21 in order to make the system further argus-eyed so that suspected activities of corporates can be traversed as soon as possible.
• The focus will be to make the whole system transparent and make it a tool that acts as an early warning system against fraud.

What is MCA21?

• A key flagship e-Governance initiative by the Ministry of Company Affairs India under the National e-Governance Plan (NeGP).

Objective:

• To fulfil the ambitions of its stakeholders in the 21 st century via implementation of a service centric approach. The decisive point of this unparalleled go-ahead is the enhanced speed and certainty in the delivery of the services by Ministry of Corporate Affairs (MCA).
• The improvement is chiefly enabled via the mechanism of secure electronic-Filing (e-Filing) for all the services provided by the Registrar Of Companies (ROC) including incorporation of a company, yearly filing, registration of charges and other event based filings.
• A niftier push on computerization in regular corporate filings will let the government to keep a check on illegal or slack activities by companies.

Where was the programme rolling out?

• In 2006, the programme was launched at Coimbatore on February 18, 2006.

Significance of MCA21 for Banks and Financial Institutions:

MCA21, services the interests of the Banks and Financial Institutions via the process of “Registration of Charges”. This specific process of “Registration of Charges” amounts to a sizable transaction volume each year of MCA. The Charge Registration information is an invaluable input for credit evaluation. There are hardships experienced in this regard in obtaining accurate information in a timely manner. Switching over to e-Governance mode will mitigate these difficulties. However, this change is expected to be only gradual.

The MCA21 system is designed to encompass a database which would be of brobdingnagian value to organisations in their business operations. The database in particular will relate to the creation/ subsistence of charges created against advances sanctioned and released by banks/Financial Institutions to the corporate world.

At present MCA21 payments are allowed via Credit Card, Internet Banking & Physical Challan. The Ministry of Corporate Affairs has authorized 5 banks (Indian Bank, HDFC, ICICI, PNB and SBI) for collection of MCA21 fees, i.e. only the account holders of these banks can avail Internet banking facility. Further, payment via challan can only be made in the authorized branches of these above 5 banks. Although this was a key advancement equated to the earlier manual system, it induced delays in incorporation of companies and processing of other e-Forms. In order to wipe out discommodes induced due to payment processing delays, Ministry of Corporate Affairs is introducing payment of MCA fees via NEFT (National Electronic Fund Transfer) mode, in addition to already existent payment methods.

More on MCA21

Month: Current Affairs - June, 2012