The Bombay Stock Exchange (BSE) has slapped fines on 530 listed companies for failing to meet a deadline to appoint a women director and boost gender diversity in their boardrooms, a BSE official said.
The Securities and Exchange Board of India (SEBI) last year imposed a quota of at least one female director on the board of every listed firm, and warned of "very serious" consequences if the thousands of companies did not comply by an April 1 deadline.
The BSE said in a statement that SEBI rules meant companies who failed to comply would face a scheduled fine. This ranging from 50,000 rupees ($790) to 142,000 rupees ($2,240) to Oct. 1, 2015. After this, they would pay an additional 5,000 rupees ($78) per day until they complied.
"As per the provisions of the SEBI circular, BSE has till date (July 13) issued advisory letters to 530 companies regarding levy of fines for non-compliance with the said provision within the prescribed timelines," said a statement.
A BSE spokesman said he could not disclose the names of the 530 firms from the 5,711 companies listed on the exchange that were being penalized.
The National Stock Exchange (NSE) said it had also sent out letters informing 260 listed firms, many of which are also listed on the BSE, of its intention to levy fines.
An NSE spokesman said SEBI could take further action against companies which had not paid up fines and appointed a woman director by Sept 30, 2015.
"SEBI may take any other action, against the non-compliant entities, their promoters and/or directors or issue such directions in accordance with law, as considered appropriate," he said quoting the SEBI directive.
According to PRIME Database, a market research group, which monitors the NSE, 105 companies out of 1,733 still had vacancies for women directors on their boards.
These include private firms such as Aditya Birla Chemicals, Nissan Copper Ltd. and Infotech Ltd as well as state-run companies such as the Bank of India, the State Trading Corporation of India and the Bank of Maharashtra.
Analysts welcomed the move, but said it was insufficient to force companies give women seats at the tables.
"The fines really are not enough. If you look at it, a company would be paying only around 63,000 rupees or $1,000 - for non-compliance if they paid today," said Pranav Haldea, PRIME Database's Managing Director.
"Asking a company to pay that amount will not exactly burn a hole in their pockets."
SEBI could take stronger action such as suspension from trading or freezing promoters' share holdings, Haldea said.
The companies have argued there are too few professionally qualified women to fill boardroom positions. But others say there are many women who can do the job but need support in terms of visibility and networking.
"While SEBI is right to have fined companies for non-compliance to appoint women on boards, is the government doing enough to ensure that women are appointed on boards of companies?" said Sarika Bhattacharyya, co-founder and director of Biz Divas, a non-profit promoting women leadership.
"India is still in the nascent stage of appointing women on boards and if necessary steps are taken by the government, we should be able to see better traction."
Ahead of SEBI's April 1 deadline, thousands of companies rushed to recruit women directors, with many installing the wives and mother-in-laws of their top executives.
But the scarcity of women in the boardroom is not unique to India. Nearly one-fifth of the world's 200 largest companies have no women directors, according to an August 2014 report by Biz Divas.