What changed
The Central Government exempted all associations (except political parties) from Section 6(1-A) of the Foreign Contribution (Regulation) Act, 1976, allowing them to accept foreign contributions for Tsunami relief without prior approval. This exemption is effective immediately and lasts until March 31, 2005. RRBs must ensure associations open a new 'Tsunami Relief Account' and follow specific conditions.
What it means for you
RRBs can now credit foreign contributions to Tsunami relief accounts without insisting on prior government permission, speeding up aid delivery. However, banks must verify that associations open a separate designated account and submit required forms (FC-IA, FC-3, FC-6) within stipulated timelines. Non-compliance could expose banks to regulatory risk.
What you must do
- Instruct all branches to allow associations to open a new 'Tsunami Relief Account' for foreign contributions without prior FCRA approval.
- Ensure associations submit Form FC-IA to the Ministry of Home Affairs within one week of opening the designated account.
- Monitor that associations maintain separate accounts and records for Tsunami relief funds and file FC-3/FC-6 within four months of year-end.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
All Regional Rural Banks (RRBs), Associations with cultural, economic, educational, religious, or social programmes (excluding political parties), Branches handling foreign contribution accounts
Can any association accept foreign contributions for Tsunami relief without prior approval?
Yes, all associations except political parties are exempt from Section 6(1-A) of the FCRA until March 31, 2005, provided they open a designated 'Tsunami Relief Account' and comply with reporting conditions.
What are the key conditions RRBs must enforce for these accounts?
RRBs must ensure a new bank account is opened and designated as 'Tsunami Relief Account', foreign contributions are credited only to this account, separate records are maintained, and Form FC-IA is submitted within one week of account opening.
What happens if an association fails to submit the required forms?
Non-compliance with conditions like filing FC-IA, FC-3, or FC-6 could lead to regulatory action. RRBs should advise associations to adhere strictly to the timelines to avoid penalties.