What changed
The Foreign Contribution (Regulation) Act, 2010 and its Rules came into force on May 1, 2011, repealing the 1976 Act. RBI consolidated its guidance into a master circular covering salient features, prohibitions, registration requirements, and bank reporting duties under the new law.
What it means for you
Banks must update their compliance frameworks to align with FCRA 2010, which tightens rules on foreign contributions. They need to ensure only registered entities receive such funds, report suspicious transactions, and maintain proper accounts. Non-compliance could lead to regulatory action.
What you must do
- Review and update internal policies to comply with FCRA 2010 and Rules.
- Ensure only registered entities (or those with prior permission) receive foreign contributions through scheduled banks.
- Report any suspicious or non-compliant foreign contribution transactions to authorities.
- Train staff on FCRA 2010 provisions, especially prohibitions and reporting requirements.
- Refer to the full Act and Rules for detailed compliance; seek legal advice if needed.
Who it affects
All scheduled commercial banks (excluding RRBs), Compliance and AML departments, Branches handling foreign contribution accounts
What is the key change from the old FCRA 1976 to FCRA 2010?
FCRA 2010 repeals the 1976 Act and introduces stricter rules on who can accept foreign contributions, requiring registration or prior permission, and imposes new reporting obligations on banks.
Do banks need to report foreign contribution transactions?
Yes, banks must report to authorities as per the FCRA Rules, including details of accounts and any suspicious activities related to foreign contributions.
Are all banks covered by this circular?
No, it applies to all scheduled commercial banks excluding Regional Rural Banks (RRBs).