What changed
The Central Government, via Ministry of Home Affairs order dated December 30, 2004, exempted associations (excluding political parties) from Section 6(1-A) of FCRA, 1976, allowing them to accept foreign contributions for tsunami relief without prior approval. This exemption is effective immediately and valid until March 31, 2005. RBI has directed all State and District Central Co-operative Banks to implement this relaxation.
What it means for you
Co-operative banks can now credit foreign contributions for tsunami relief to designated accounts without verifying prior government permission, provided the recipient association meets six specific conditions. Banks must ensure a separate 'Tsunami Relief Account' is opened and that the association submits Form FC-IA within one week and audited returns within four months of the financial year close. This streamlines relief fund flow but requires strict compliance monitoring to avoid FCRA violations.
What you must do
- Instruct all branches to allow associations to open a new 'Tsunami Relief Account' for foreign contributions.
- Verify that the recipient association is not a political party and has a definite cultural, economic, educational, religious, or social programme.
- Ensure the association submits Form FC-IA to the Ministry of Home Affairs within one week of account opening.
- Remind associations to file Form FC-3 and FC-6 (for articles) certified by a Chartered Accountant within four months of the year-end.
- Maintain separate records for all transactions in the Tsunami Relief Account and report to RBI Regional Office as required.
Who it affects
State and District Central Co-operative Banks, Associations receiving foreign contributions for tsunami relief, Branches handling foreign remittances for relief purposes
Can any association open a Tsunami Relief Account without prior FCRA registration?
Yes, but only for tsunami relief until March 31, 2005. The association must not be a political party and must have a definite cultural, economic, educational, religious, or social programme. They still need to submit Form FC-IA within one week of opening the account.
What are the reporting requirements for the bank after opening the Tsunami Relief Account?
The bank must ensure the association submits Form FC-IA to the Ministry of Home Affairs within one week. Additionally, the association must file Form FC-3 and FC-6 (for articles) certified by a Chartered Accountant within four months of the financial year closure. The bank should maintain separate records and acknowledge receipt to the RBI Regional Office.
Does this exemption apply to political parties?
No, the exemption explicitly excludes political parties. Only associations with a definite cultural, economic, educational, religious, or social programme are eligible.