Image Source : FILE PHOTO RBI modifies the NEFT, RTGS systems to accommodate FCRA transactions
The Reserve Bank of India (RBI) has introduced new changes in NEFT and RTGS systems for Foreign Contribution (Regulation) Act (FCRA) related transactions. This comes after the Home Ministry mandated State Bank of India (SBI) to report all overseas donors’ details, including the purpose of remittances, on a daily basis. According to the FCRA, all foreign contributions should be received only in the “FCRA account” of SBI, New Delhi Main Branch (NDMB). Contributions to the FCRA are received directly from foreign banks through SWIFT and through Indian intermediary banks through the NEFT and RTGS systems.
The RBI has asked banks to make necessary changes in their core banking/middleware solutions to capture the requisite details while forwarding the foreign donations through NEFT and RTGS systems to SBI. The new guidelines will go into effect on March 15, 2023.
ALSO READ: Here is how new ITR forms are different from old ones – all you need to know
To meet the requirements of the Ministry of Home Affairs (MHA), the RBI has directed SBI to collect donor information in all such transactions, including name, address, country of origin, amount, currency, and purpose of remittance. SBI is also required to report these details to MHA on a daily basis.
The FCRA regulations have been tightened since the Narendra Modi-led government came to power in 2014. In recent years, nearly 2,000 Non-Governmental Organizations (NGOs) have had their FCRA registration cancelled for violating various provisions of the law. As of December-end 2021, there were 22,762 FCRA-registered organizations.
ALSO READ: Here’s why residents of THIS Indian state do not have to pay income tax
FAQs:
Q1: What is NEFT?
NEFT stands for National Electronic Funds Transfer. It is a payment system used in India that enables individuals, companies, and organizations to transfer money from one bank account to another bank account electronically.
Q2: What is RTGS?
RTGS stands for Real Time Gross Settlement. It is a payment system used in India that enables large-value fund transfers between banks on a real-time basis. Unlike NEFT, RTGS transactions are processed individually, and the settlement of each transaction is done immediately and on a gross basis.
Latest Business News
Source link
