FCRA Master Circular: Banks' Role in Foreign Contributions

RBI/2009-2010/72 Ref No. DBOD. AML. BC. No.1 / 14.08.001 / 2009 – 10 July 01, 2009 The Chairman & CEOs of all Scheduled Commercial Banks (excluding RRBs) and all Financial Institutions Dear Sir, Master Circular – Foreign Contribution ( Regulation ) Act, 1976 – Obligations of Banks in Regulating Receipt of Foreign Contributions by Associations / Organizations in India Please refer to our Master Circular DBOD.AML.BC.No.8/14.08.001/2008–09 dated July 01, 2008 consolidating instructions / guidelines issued to banks till June 30, 2008 on Foreign Contribution (Regulation) Act, 1976 – Obligations of Banks in Regulating Receipt of Foreign Contributions by Associations/Organizations in India. This Master Circular is a consolidation of the instructions issued in this regard up to June 30, 2009. 2.  The Master Circular has been placed on RBI website:( http://www.rbi.org.in ) Yours  faithfully, (Vinay Baijal) Chief General Manager Master Circular Purpose The Foreign Contribution (Regulation) Act, 1976 (FCRA, 1976) casts certain obligation on banks in regard to acceptance of foreign inward remittances for onward credit to the accounts of associations/organisations in India. Under Section 10 of Foreign Contribution (Regulation) Act, 1976 Government has prohibited some of the Associations/Organisations from receiving foreign contribution. Further, Section 5 of the Act ibid provides that no organisation of a political nature, not being a political party, can accept foreign contribution except with the prior permission of the Central Government. The Act also provides that associations having a definite cultural, economic, educational, religious and social programme should get themselves registered with the Ministry of Home Affairs, Government of India, New Delhi before receiving any foreign contribution. Reserve Bank has issued guidelines from time to time advising the banks that while accepting foreign contribution for onward credit to the accounts of association/organisation, it should be ensured that the concerned association/organization is registered with Ministry of Home Affairs or has their prior permission to receive such foreign contribution as required under the Act ibid and that no branch other than the designated branch accepts the foreign contribution. Banks have also been advised to send a half-yearly report of receipt of such foreign contribution to Central Government. This Master Circular consolidates all the instructions issued to banks in this regard from time to time. Previous instructions The instructions issued vide this master circular consolidate all instructions issued by the Reserve Bank on Foreign Contribution ( Regulation ) Act, 1976 – Obligations of Banks in Regulating Receipt of Foreign Contributions by Associations / Organizations in India. A list of circulars/ instructions which have been consolidated in this master circular, is given in Annex – I . Application These instructions are applicable to all the scheduled commercial banks (excluding RRBs) and all Financial Institutions. Structure 1.

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-2010/72 · issued 01 Jul 2009. The plain-English explanation above is BankPulse’s own independent summary.

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