RBI: Introduction of Foreign Contribution (Regulation) Act (FCRA) related transaction code in NEFT and RTGS Systems

RBI: Introduction of Foreign Contribution (Regulation) Act (FCRA) related transaction code in NEFT and RTGS Systems– Reserve Bank of India vide its Circular dated 16th February, 2023 regarding the introduction of Foreign Contribution (Regulation) Act (FCRA) related transaction code in NEFT and RTGS Systems.

February 2023 Current Affairs Quiz

New RBI rules for foreign donations via NEFT, RTGS:

Currently, only the “FCRA account” of the State Bank of India (SBI), New Delhi Main Branch, may be used to receive foreign contributions (NDMB). Direct payments to the FCRA account are made by overseas banks using the SWIFT system, and by Indian intermediary banks using the NEFT and RTGS systems. The donor details such as name, address, country of origin, amount, currency, and purpose of remittance are required to be captured in such transactions and SBI is required to report the same to Ministry of Home Affairs (MHA) on daily basis.

The required modifications have been made to the NEFT and RTGS systems; the technical details are provided in the circular’s annexure. Member banks are advised to incorporate 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 Chairman, Managing Director, and Chief Executive Officer of member banks that participate in the NEFT and RTGS Services are subject to this Circular, which will take effect on March 15, 2023.