Stock Exchanges Impose Penalty on RailTel Due to Violation of Board Composition Rules

Stock Exchanges Impose Penalty on RailTel Due to Violation of Board Composition Rules

RailTel Corporation of India Limited has disclosed the imposition of a penalty from both stock exchanges due to non-compliance with board composition rules. The penalty has been levied for the quarter ending December 31, 2025.

The National Stock Exchange and BSE levied an equal penalty of Rs 5.42 lakh each (inclusive of GST).

Background of Case

The penalty is related to the non-compliance with Regulation 17(1) of the SEBI LODR, which outlines the rules related to the composition of the board. Regulation 17(1) mandates the specific composition requirements for the board of directors of a listed entity. The listed companies are required to maintain a proper composition of the board. However, the NSE and the BSE have alleged that RailTel has failed to comply with this requirement.

The company has stated that the non-compliance occurred because it is a government company. The President of India has the authority to appoint directors (including the independent director) on the Board of RailTel. The company stated that it has no role in the directors’ appointment.

“Requests have already been made from time to time to the MoR for the appointment of requisite number of Directors including Independent Directors on the Board of the Company“, RailTel said.

Key Details of the Order

Particular	Details
Authorities imposing fine	NSE and BSE
Violated Section	Regulation 17(1) of SEBI LODR
Related Period	Quarter ended December 31, 2025
Fine by NSE	Rs 5,42,800 (including GST)
Fine by BSE	Rs 5,42,800 (including GST)

Financial Impact

RailTel clarified that both the penalty orders do not have any significant impact on the financial, operation or any other activities.

Company’s Disclosure Compliance

RailTel made the disclosure to both NSE and BSE under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.