What changed
This July 2009 Master Circular consolidates all previous FCRA instructions issued up to June 30, 2009, building on the July 2008 circular. It updates the consolidated reference for banks.
What it means for you
Banks must continue strict compliance with FCRA, 1976 when crediting foreign inward remittances to associations. Non-compliance risks regulatory action, as the circular reiterates obligations like designated branch usage and half-yearly reporting to the Central Government.
What you must do
- Verify that recipient associations are registered with MHA or have prior permission before crediting foreign contributions.
- Ensure only designated branches handle foreign contribution receipts, as per FCRA guidelines.
- Submit half-yearly reports of foreign contribution receipts to the Central Government in the prescribed format.
- Train staff on FCRA provisions, especially prohibitions under Section 4 and Section 10, to avoid violations.
Who it affects
All scheduled commercial banks (excluding RRBs), All financial institutions, Branches handling foreign inward remittances for associations
What is the key requirement under FCRA for banks when crediting foreign contributions?
Banks must ensure the recipient association is registered with the Ministry of Home Affairs or has prior permission from the Central Government, as per Section 5 and Section 10 of FCRA, 1976.
Are all bank branches allowed to accept foreign contributions?
No, only designated branches can accept foreign contributions for onward credit to associations. Banks must ensure no other branch handles such receipts.
What reporting obligations do banks have under this circular?
Banks must send a half-yearly report of foreign contribution receipts to the Central Government, using the format provided in the Master Circular.