The Reserve Bank of India (RBI) has made changes to the NEFT and RTGS systems for Foreign Contribution (Regulation) Act (FCRA) related transactions following the Home Ministry’s order for State Bank of India (SBI) to report details of overseas donors on a daily basis, including the purpose of remittances. Under the FCRA, foreign contributions can only be received in the “FCRA account” of SBI’s New Delhi Main Branch, with contributions coming directly from foreign banks through SWIFT and from Indian intermediary banks through NEFT and RTGS systems.
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To comply with the requirements of the Ministry of Home Affairs (MHA), the RBI has mandated SBI to capture donor details such as name, address, country of origin, amount, currency, and purpose of remittance for transactions, which SBI must report to the MHA daily. The new instructions will be effective from March 15, 2023.
RBI has also instructed banks to incorporate necessary changes in their core banking/middleware solutions to capture the requisite details while forwarding foreign donations through NEFT and RTGS systems to SBI.
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Since 2014, the FCRA rules have been tightened under the Narendra Modi-led government, resulting in the cancellation of FCRA registration for nearly 2,000 Non-Governmental Organisations (NGOs) for violating various provisions of the law. As of December 2021, there were 22,762 FCRA-registered organisations.
(With inputs from PTI)
