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 ..... is a consolidation of the Reserve Bank s guidelines on Foreign Contribution (Regulation) Act, 2010 and Foreign Contribution (Regulation) Rules, 2011 issued to banks up to June 30, 2014. 4. The Master Circular has been placed on RBI website : http://www.rbi.org.in Yours faithfully, (Lily Vadera) Chief General Manager Master Circular on Implementation of the Provisions of Foreign 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 Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us and social programmes should get themselves registered with the Government of India before accepting any foreign contribution . In case a person falling in the above category is not registered with the Central Government, it can accept foreign contribution only after obtaining prior permission of the Central Government. Further, under the Act, the Central Government is empowered to prohibit any person or organisation 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith. The Act extends to the whole of India, to its citizens outside India and also to associate branches or subsidiaries outside India, of companies or body corporate, registered or incorporated in India. 3.2 Prohibition 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: Candidate for election; Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper; Judge, government servant or employee of any entity controlled or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3.3 Restrictions on Acceptance of Foreign Hospitality 3.3.1 The Act imposes restrictions on acceptance of foreign hospitality by certain specified persons. It mandates that no member of a Legislature or office-bearer of a political party or Judge or Government servant or employee of any corporation or any other body owned or controlled by the Government shall, while visiting 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 obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepting any foreign hospitality. Where the Central Government is satisfied, after making such inquiry as it may deem fit, that any person has in his custody or control any article or currency or security, whether Indian or foreign, which has been accepted by such person in contravention of any of the provisions of the Act, it may, by order in writing, prohibit such person from paying, 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 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h fine or with both. The Act provides that any offence punishable under the Act (whether committed by an individual or association or any officer or employee thereof), not being an offence punishable with imprisonment only, may, before the institution of any prosecution, be compounded by such officers or authorities and for such sums as the Central Government may, 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 specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tware developed for the purpose. Such online submission was optional till October 31, 2013. From November 1, 2013 onward, online submission of report is compulsory. 4.6 It has been made a duty of the bank concerned to send a report to the Central Government within thirty days from the date of such last transaction 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 FRRA, 2010 and FCR Rules, 2011 and banks obligations under the Act 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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