TMI BlogGuidelines issued under Section 36(1)(a) of the Banking Regulation Act, 1949 -Implementation of the provisions of Foreign Contribution (Regulation) Act, 2010X X X X Extracts X X X X X X X X Extracts X X X X ..... reign Contribution (Regulation) Act, 2010 1 Introduction 2 Guidelines 3 Salient Features of the FCRA, 2010 3.1 Introduction to FCRA, 2010 3.2 Prohibition on Acceptance of Foreign Contribution 3.3 Restrictions on Acceptance of Foreign Hospitality 3.4 Registration for Acceptance of Foreign Contribution 3.5 Prohibitions and Restrictions on Receipt, Transfer, Utilization etc. of Foreign Contribution 3.6 Foreign Contribution to be Received through a Scheduled Bank 3.7 Maintenance of Accounts and Disposal of Assets 3.8 Powers of Inspections and Seizure 3.9 Miscellaneous Issues 4 Rules Framed under the Act and Reporting by Banks 1. Introduction 1.1 Government of India, Ministry of Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion not specified in the Act from accepting any foreign contribution and to require any person or class of persons, not specified in it to obtain prior permission of the Central Government before accepting any foreign hospitality. 2.2 The Act casts certain obligations on banks in relation to the receipt of foreign contributions. The Act stipulates that every person who has been granted a certificate of registration/prior permission as stipulated in the Act shall receive foreign contribution in a single account and only through such branches of a bank as may be specified in his/her application. It strictly prohibits the receipt or deposit of any other funds (other than foreign contribution) in such accounts. The Act mandates that every bank or authorized person in foreign exchange shall report to specified authority, the prescribed amount of foreign remittance, source and manner in which foreign remittance was received and other particulars in such form and manner as may be prescribed. Section 18 of the Act requires every person who has been granted a certificate of registration or prior permission under the Act to intimate the Central Government on the details provided therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition on Acceptance of Foreign Contribution The Act stipulates that certain persons are totally barred from accepting any foreign contribution. The term foreign contribution is defined in Clause (h) of Section 2 of the Act to mean the donation, delivery or transfer made by a foreign source of any article (not being an article of gift for personal use, the market value of which is not more than the specified amount), currency (whether Indian or foreign) or any security. The following are the persons prohibited from accepting foreign contribution: (a) Candidate for election; (b) Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper; (c) Judge, government servant or employee of any entity controlled or owned by the Government; (d) Member of any Legislature; (e) Political party or office bearers thereof; (f) Organisations of a political nature as may be specified; (g) Associations or companies engaged in the production or broadcast of audio news or audiovisual news or current affairs programmes through any electronic mode or form or any other mode of mass communication; (h) Correspondent or columnist, cartooni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any country or territory outside India, accept, except with the prior permission of the Central Government, any foreign hospitality. However, such permission would not be necessary for an emergent medical aid needed on account of sudden illness contracted during a visit outside India. The term foreign hospitality is defined to mean any offer, not being a purely casual one, made in cash or kind by a foreign source for providing a person with the costs of travel to any foreign country or territory or with free boarding, lodging, transport or medical treatment. 3.3.2 Apart from this, the Central Government is empowered to prohibit any person or organization not specified in the Act from accepting any foreign contribution and to require any person or class of persons, not specified in the Act to obtain prior permission of the Central Government before accepting any foreign hospitality. 3.4 Registration for Acceptance of Foreign Contribution Section 11 of the Act mandates that except as otherwise provided in the Act, no person having a definite cultural, economic, educational, religious or social program shall accept foreign contribution, unless such person obtains a certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, delivering, transferring or otherwise dealing with, in any manner whatsoever, such article or currency or security except in accordance with the written orders of the Central Government. 3.6 Foreign Contribution to be received through a Scheduled Bank Section 17 of the Act is of special importance to bankers. It states that every person who has been granted a certificate or given prior permission under Section 12 shall receive foreign contribution in a single account only through such one of the branches of a bank as he may specify in his application for grant of certificate. Such person can open one or more accounts in one or more banks for utilising the foreign contribution received by him. However, no funds other than foreign contribution shall be received or deposited in such account or accounts. The Act makes it mandatory for every bank or authorised person in foreign exchange to report to such specified authority (a) the prescribed amount of foreign remittance (b) the source and manner in which the foreign remittance was received and (c) other particulars, in such form and manner as may be prescribed. Every person who has been granted a certificate or given p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, by Notification in the Official Gazette, specify in this behalf. The Central Government may give such directions as it may deem necessary to any other authority or any person or class of persons regarding the carrying into execution of the provisions of the Act. 4. Rules framed under the Act and reporting by banks 4.1 In exercise of the powers conferred by Section 48 of the Act, the Central Government has framed the Foreign Contribution (Regulation) Rules, 2011 for carrying out the provisions of the Act. The Rules, inter alia, provide for Guidelines for the Central Government for declaration of an organisation to be of a political nature, the nature of activities which would be treated as speculative activities, what constitutes administrative expenses, procedure for availing of foreign hospitality by specified categories of persons, procedure relating to application for obtaining 'registration' or 'prior permission' to receive foreign contribution, whom to make application for compounding, procedure for transferring foreign contribution to other registered or unregistered persons, the Forms to be used for various purposes etc. 4.2 Rule 13 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of receipt of any foreign contribution in excess of one crore rupees or equivalent thereto in a single transaction or in transactions within a duration of thirty days, by any person, whether registered or not under the Act, and such report also has to include the aforesaid details. --------- Annex I List of circulars on FCRA, 2010 consolidated in the Master Circular Sr.No. Circular No. and Date Subject Gist of Instructions 1 DBOD. AML. BC. No. 80/ 14.08.001/ 2011-2012 dated February 06, 2012 Guidelines issued under Section 36(1)(a) of the B R Act, 1949 implementation of provisions of FCRA, 2010 Salient features of the FCRA, 2010 and FCR Rules, 2011 and banks obligations under the Act 2. DBOD. AML. No.4814/ 14.08.001/ 2013-14 dated September 20, 2013 Online Reporting of Receipt of Foreign Contribution by banks Banks were advised about instructions received from Ministry of Home Affairs (MHA), Government of India, accordingly, banks have to report ..... X X X X Extracts X X X X X X X X Extracts X X X X
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