📢 Big Move for CSR in India!

The Ministry of Corporate Affairs (MCA) has expanded the scope of Schedule VII of the Companies Act, 2013 — and this is a significant step forward for impact-driven finance.

📅 On 27 May 2026, MCA added clause (xiii) to Schedule VII:

📌 Subscription to ZCZP Instruments on the Social Stock Exchange now qualifies as a valid CSR activity.

But first — what does that even mean?

🔷 What is the Social Stock Exchange (SSE)?

A capital market — but for social impact.

The SSE is a SEBI-regulated platform (within NSE/BSE) where NPOs — NGOs, trusts, Section 8 companies — can raise funds from the public in a structured, transparent manner, with mandatory disclosures and annual progress reports.

🔷 What is a Zero Coupon Zero Principal (ZCZP) Instrument?

The instrument through which NPOs raise funds on the SSE.

The name says it all:

✅ Zero Coupon → No interest paid to the subscriber

✅ Zero Principal → No money returned at maturity

The return is social, not financial.

You fund a cause. The NPO runs the project.

It’s a donation — structured like a financial instrument.

🔷 What does this mean for companies under CSR?

• Up to 10% of annual CSR expenditure can be routed through this channel
• New Rule 4A in CSR Policy Rules, 2014 governs the framework
• Project execution and evaluation rest entirely with the NPO
• No impact assessment required for the subscribing company
• NPOs must complete projects within 3 succeeding financial years
• Unspent funds on termination go to a Schedule VII fund (PM CARES, Swachh Bharat Kosh, Clean Ganga Fund, etc.)

💡 Why should companies pay attention?

For years, CSR deployment has meant significant compliance burden — vetting agencies, monitoring projects, and conducting impact assessments.

The ZCZP route simplifies this.

Subscribe to a SEBI-regulated instrument, the NPO handles execution, and the company is exempt from impact assessment for this portion of its CSR spend.

✅ Transparent.

✅ Regulated.

✅ Legally valid.