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 ..... (Regulation) Act, 1976 stands repealed. 2. The salient features of the new Act are given in the Annex to this circular. This circular is intended only to serve as a guide to the banks for carrying out their obligations under the Act and the Rules made thereunder. In case of doubt, banks should make it a point to refer to the text of the Act and the Rules, and if found necessary, proper legal advice should be taken. Yours faithfully, (Deepak Singhal) Chief General Manager- in-Charge Encl: As above GUIDELINES Government of India, Ministry of Home Affairs has published a Notification S.O. 909 (E) dated the 29th April, 2011, in the Official Gazette bringing into force the Foreign Contribution (Regulation) Act, 2010 ( the Act ) with effect from May 1, 2011. A Gazette Notification G.S.R. 349 (E) dated the 29th April, 2011, has also been issued notifying the Foreign Contribution (Regulation) Rules, 2011 ( the Rules ) made under Section 48 of the Act. The Rules have come into force simultaneously with the Act. With the coming into force of the Act, Foreign Contribution (Regulation) Act, 1976 stands repealed. Therefore, it has now become necessary f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration or prior permission under Section 6 of the Foreign Contribution (Regulation) Act, 1976, will continue to be eligible to receive foreign contribution under the Act and such registration shall be valid for a period of five years from the date on which the Act came into force. Any permission to accept foreign hospitality granted under Section 9 of the repealed Act would also be deemed to be the permission granted under the Act until such permission is withdrawn by the Central Government. 5. Reserve Bank had been issuing guidelines from to time under the Foreign Contribution Regulation Act, 1976 advising banks, that while accepting foreign contribution for onward credit to the accounts of persons, it needs to be ensured that the concerned persons/organisations are registered with the Central Government or has the prior permission to receive such foreign contribution if required by law, and that no branch other than the specified branch accepts foreign contribution . Banks were also advised to forward the report of receipts of such contributions to the Central Government. Some irregularities and deviations from the prescribed procedures were noticed in the implementat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h any electronic mode or form or any other mode of mass communication; Correspondent or columnist, cartoonist, editor, owner of the association or company referred to in (g) above. The Act empowers the Central Government to specify organizations as organizations of political nature by publication in the Official Gazette. Foreign contribution can however be accepted by the above-mentioned persons in the following specific cases: by way of salary, wages or other remuneration due to him or to any group of persons working under him, from any foreign source or by way of payment in the ordinary course of business transacted in India by such foreign source; or by way of payment, in the course of international trade or commerce, or in the ordinary course of business transacted by him outside India; or as an agent of a foreign source in relation to any transaction made by such foreign source with the Central Government or State Government; or by way of a gift or presentation made to him as a member of any Indian delegation, provided that such gift or present was accepted in accordance with the rules made by the Central Government with regard to the accepta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional, religious or social program shall accept foreign contribution, unless such person obtains a certificate of registration from the Central Government. 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. The Central Government can, by Notification in the Official Gazette, specify the person or class of persons who shall obtain its prior permission before accepting the foreign contribution, the areas in which such contribution shall be accepted, the purpose for which foreign contribution shall be utilised and the sources from which foreign contribution shall be accepted. The Central Government is also authorised to suspend or cancel the registration so granted. Every person who has been granted a certificate under Section 12 shall have such certificate renewed within six months before the expiry of the period of the certificate. 5. Prohibitions and restrictions on receipt, transfer, utilization etc. of foreign contribution The Act imposes a prohibition, on persons registered and granted certificate or has obtained prior permis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm and manner as may be prescribed. Every person who has been granted a certificate or given prior approval under the Act has to give, within such time and in such manner as may be prescribed, an intimation to the Central Government, and such other authority as may be specified by the Central Government, as to the amount of each foreign contribution received by it, the source from which and the manner in which such foreign contribution was received, and the purposes for which, and the manner in which such foreign contribution was utilised by him. Further, every person receiving foreign contribution has to submit a copy of a statement indicating therein the particulars of foreign contribution received, duly certified by officer of the bank or authorised person in foreign exchange, and furnish the same to the Central Government. 7. Maintenance of accounts and disposal of assets Section 19 of the Act stipulates that every person who has been granted a certificate or given prior approval as above has to maintain accounts of the foreign contribution received and utilized in the prescribed manner. Where any person who was permitted to accept foreign contribution under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or unregistered persons, the Forms to be used for various purposes etc. Rule 13 of the said Rules mandates that in case a person who has been granted a certificate of registration or prior permission receives foreign contribution in excess of one crore rupees, or equivalent thereto, in a financial year, he/it shall place the summary data on receipts and utilisation of the foreign contribution pertaining to the year of receipt as well as for one year thereafter, in the public domain. It is important to note that in terms of Rule 15, the amount of foreign contribution lying, unutilised in the exclusive foreign contribution bank account of a person whose certificate of registration has been cancelled shall vest with the banking authority concerned till the Central Government issues further directions is the matter. In case a person whose certificate of registration has been cancelled transfers/has transferred the foreign contribution to any other person, the above condition would apply to the person to whom the fund has been transferred. Rule 16 of the said Rules provides that every bank has to send a report to the Central Government within thirty days of any transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
