Get All Access for $5/mo

RBI Updates Rules For Foreign Donations Via NEFT, RTGS As per the new regulations, under the FCRA, foreign contributions must be received only in the 'FCRA account' of State Bank of India, New Delhi Main Branch

By Teena Jose

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

RBI Twitter handle

The Reserve Bank of India (RBI), on Thursday, has made some necessary regulations in national electronic fund transfer (NEFT) and real-time gross settlement (RTGS) systems for Foreign Contribution Regulation Act (FCRA) related transactions, with Home Ministry seeking reports of all overseas donors from SBI, including purpose of remittances on a daily basis, according to a PTI report.

"Necessary changes have been introduced in NEFT and RTGS system and the instructions will be effective from 15 March 2023," said RBI in an official circular, named 'Introduction of Foreign Contribution (Regulation) Act (FCRA) related transaction code in NEFT and RTGS Systems' as per the report.

As per the new regulations, under the FCRA, foreign contributions must be received only in the 'FCRA account' of State Bank of India, New Delhi Main Branch. The contributions to the FCRA account are received directly from foreign banks through SWIFT and from Indian intermediary banks through NEFT and RTGS systems.

The FCRA was enacted in 1976 in order to maintain strict control over voluntary organisations and political associations that received foreign fundings. In 1984, an amendment was made to the act requiring all the non-governmental organisations to register themselves with the Home Ministry. In 2010, the act was repealed and a new act with strict provisions was enacted.The act aims at keeping a check on foreigners influencing the Indian electoral politics, journalists, public servants etc. for wrong purposes or activities detrimental to the public interest.

According to the report, the RBI said in terms of extant requirements of the Ministry of Home Affairs (MHA), the donor details such as name, address, country of origin, amount, currency, and purpose of remittance are required to be captured in such transactions and SBI is required to report the same to MHA on daily basis.

In addition, the RBI has reportedly asked banks to incorporate necessary changes in their core banking/ middleware solutions to capture the requisite details while forwarding the foreign donations through NEFT and RTGS systems to SBI.

In 2015, as per available reports, the Ministry of Home Affairs (MHA) issued new guidelines requiring NGOs to certify that accepting foreign funding will not jeopardise India's sovereignty and integrity. It further stated that all such NGOs would be required to have accounts in either nationalised or private banks with core banking services in order to provide security agencies with real-time access.

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.
Business News

'It's Not About You': How to Fire Someone Effectively, According to Kevin O'Leary

O'Leary says that if you can't fire someone, you aren't the right leader for the organization.

Entrepreneurs

This Entrepreneur is Carrying the Torch Toward a Brighter Future for the Real Estate Industry

Craig Sewing founded American Dream TV ten years ago and he seeks to empower the current and future players in real estate by providing a network that celebrates authenticity and community-driven storytelling.

Business News

Meta Makes $1 Million Dollar Donation to Donald Trump's Inaugural Fund

Meta CEO Mark Zuckerberg also reportedly gave Trump a pair of Ray-Ban Meta smart glasses.

Business News

'I'm Not Trying to Land on Mars': Mark Cuban Takes Dig at Elon Musk to Explain Why His Online Pharmacy Isn't Trying to Make More Money

Mark Cuban Cost Plus Drug Co. is an online pharmacy co-founded by Cuban and radiologist Alex Oshmyansky.

Innovation

4 Tips for Developing a Product Around an Unknown Concept

If you're a trailblazer in a novel space, here are four ways to forge ahead.

Side Hustle

'Hustling Every Day': These Friends Started a Side Hustle With $2,500 Each — It 'Snowballed' to Over $500,000 and Became a Multimillion-Dollar Brand

Paris Emily Nicholson and Saskia Teje Jenkins had a 2020 brainstorm session that led to a lucrative business.