RBI tweaks NEFT, RTGC rules for daily reporting of foreign remittances

RBI tweaks NEFT, RTGC rules for daily reporting of foreign remittances

Foreign donations must be accepted solely in the “FCRA account” of the State Bank of India (SBI), New Delhi Main Branch, according to the FCRA (NDMB).

The Reserve Bank of India (RBI) has implemented certain adjustments in the NEFT and RTGS systems for Foreign Contribution (Regulation) Act (FCRA)-linked transactions, with the home ministry forcing SBI to record full data of foreign donors, including the purpose of remittances, on a daily basis.

Foreign donations must be accepted solely in the “FCRA account” of the State Bank of India (SBI), New Delhi Main Branch, according to the FCRA (NDMB).

Contributions to the FCRA account are accepted directly from overseas banks via SWIFT and indirectly through Indian intermediate banks via the NEFT and RTGS systems.

In a circular, the RBI stated that, in accordance with existing Ministry of Home Affairs (MHA) standards, donor data such as name, address, country of origin, amount, currency, and purpose of remittance must be noted in such transactions, and SBI must report the same to MHA on a daily basis.

“Necessary changes have been introduced in NEFT and RTGS systems,” the RBI said, adding the instructions will be effective March 15, 2023.

The RBI has directed banks to make the appropriate adjustments to their core banking and middleware solutions in order to collect the essential data while transferring overseas donations to SBI via the NEFT and RTGS systems.

Since the Narendra Modi administration took office in 2014, the FCRA restrictions have been tightened, and approximately 2,000 non-governmental organisations (NGOs) have had their FCRA registrations terminated for breaking different laws. There were 22,762 FCRA-registered organisations as of the end of December 2021.