SEBI's new related party transaction rules: What you should know
SEBI has rolled out new rules for related party transactions, aiming to make life easier for companies while keeping things transparent.
Instead of a one-size-fits-all approach, the thresholds now scale with a company's annual turnover.
The idea is to reduce unnecessary paperwork and cut down on approvals—without letting anyone game the system.
Breaking down the new thresholds
For companies making up to ₹20,000 crore a year, deals above 10% of their turnover need approval.
If turnover is between ₹20,001 and ₹40,000 crore, the limit is ₹2,000 crore plus 5% of anything over ₹20,000 crore.
For even bigger firms (over ₹40,000 crore), it's ₹3,000 crore plus another 2.5% on the extra amount above that mark.
SEBI expects this update—which was detailed in a consultation paper issued in August—to cut required shareholder approvals by about 60%, helping companies focus more on business and less on red tape.