What changed
The Foreign Contribution (Regulation) Act, 2010 and its Rules came into force on May 1, 2011, repealing the 1976 Act. RBI consolidated all previous guidelines into this Master Circular, covering registration, prohibitions, and bank obligations under the new law.
What it means for you
Banks must now operate under the updated FCRA 2010 framework, which tightens rules on foreign contributions and hospitality. They need to ensure that only registered or prior-permission holders receive foreign funds through scheduled banks. Non-compliance could lead to regulatory action, so banks must update their internal processes and training accordingly.
What you must do
- Review and implement the FCRA 2010 provisions as per this Master Circular.
- Ensure all foreign contribution accounts are linked to valid registration or prior permission from MHA.
- Train staff on new reporting requirements and prohibitions under the Act.
- Update internal compliance manuals to reflect the repealed 1976 Act and new 2010 rules.
- Refer to the full Act and Rules for any doubts, and 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FCRA 2010 repealed the 1976 Act and introduced stricter rules on registration, prior permission, and reporting for foreign contributions. Banks must now follow the new Act and Rules effective from May 1, 2011.
Do banks need to re-register under FCRA 2010?
No, banks themselves do not register under FCRA; they facilitate accounts for registered entities. However, they must ensure that recipient organizations have valid registration or prior permission from the Central Government.
What should a bank do if an account holder lacks FCRA registration?
The bank should not allow receipt of foreign contributions into that account unless the entity obtains prior permission from the Central Government. Banks must report any non-compliance to the appropriate authorities.