What changed
This master circular, dated July 1, 2008, supersedes all previous instructions on regulating foreign contributions through banking channels, consolidating them into a single document. It updates the earlier circular of July 2, 2007, with revisions effective June 30, 2008.
What it means for you
Banks must strictly enforce FCRA 1976 provisions: ensure recipient associations are registered with the Ministry of Home Affairs or have prior permission, and route all foreign contributions through designated branches only. Non-compliance could lead to regulatory action, and banks must submit half-yearly reports to the central government on such receipts.
What you must do
- Verify that every association receiving foreign contributions is registered with MHA or has prior permission under FCRA 1976.
- Ensure only designated branches accept foreign contributions for onward credit to associations.
- Submit half-yearly reports of foreign contribution receipts to the central government as per the prescribed format.
- Train staff at all branches on FCRA compliance and designated branch procedures.
- Review and update internal policies to align with this master circular, superseding all earlier instructions.
Who it affects
All scheduled commercial banks (excluding RRBs), All financial institutions, Branches handling foreign inward remittances for associations/organizations
What is the key requirement under FCRA 1976 for banks accepting foreign contributions?
Banks must ensure the recipient association is registered with the Ministry of Home Affairs or has obtained prior permission from the central government before crediting any foreign contribution.
Can any branch of a bank accept foreign contributions for associations?
No, only the designated branch is authorized to accept such contributions. All other branches must redirect or reject such remittances.
What reporting obligations do banks have under this master circular?
Banks must send a half-yearly report of all foreign contribution receipts to the central government, using the format provided in the circular.