In a strong criticism of the "poorly-drafted" Companies Act, ICICI Bank's newly appointed chairman, M K Sharma, has said that tightening of norms has made it a "curse" to be a promoter and everyone is being made to pay because of a few cases like Satyam and Sahara.

Mr Sharma said there is an urgent need to completely rewrite the Act as it lays stress on regulations rather than playing a developmental role and appears to have been written for lawyers and chartered accountants rather than for companies.

Talking about the enhanced compliance procedures, Mr Sharma said it is a "curse" to be a promoter in the current times, while cap imposed on directorships has also increased the compliance requirements for individual board members.

Mr Sharma, who himself has been on various boards, said every document has to be read from cover to cover and called the scope for action against directors as a "frightening feature" given the fact that an audit committee on which the director may sit meets only five times a year.

"A law should not seek to regulate the black-sheep. You must deal with them through penal action. Just because one Satyam happened and one Sahara happened, everyone else has to play penalty for that," he said while speaking at an event here late on Tuesday evening.

Mr Sharma, who was appointed non-executive chairman in June after his predecessor K V Kamath became first President of the recently launched BRICS Bank, said that various stakeholders including the industry, ICAI and ICSI should be consulted again for rewriting the legislation.

"The law seems to have been drafted for lawyers and some chartered accountants and less for corporates. It is a very poorly-drafted piece of legislation...it is very unfortunate," Mr Sharma said.

The Companies Act, 2013 came into force from April 1, 2014 after intensive consultations over several years to replace a nearly six-decade-old Companies Act, 1956. The new law has introduced a number of provisions to tighten corporate governance norms, check frauds and safeguard the investors.

However, the government has made various changes in this law in recent months to make compliance easier for companies.

Mr Sharma, who has been a veteran in the financial services and FMCG industries, further said that rather than taking corrective actions on a few points, which discomfort the industry, there is a need to completely rewrite the law.

"A law must equally play a developmental role as it plays a regulatory role," he said.

Citing the example of Titan Industries, Mr Sharma said the company was forced to suffer reverses due to a provision under which it could not keep deposits for over a year.

This forced the Tata group company to liquidate all of their deposits resulting in heavy losses, he said, expressing a fear that travel companies who give over 20-year packages can suffer the same as the money taken for the future can be treated as a deposit.

On the Reserve Bank of India (RBI), Mr Sharma said he is all for the autonomy of the central bank but refused to elaborate further on the controversy triggered by the recent draft IFC. (NDTV)