JOIN USRBI's new norms on contribution from abroad
The RBI, on Friday, issued guidelines which stipulates that entities have to get themselves registered with the central government before accepting any foreign contribution and banks will have to forward the report of receipts of such transfers to the government.
In the guidelines issued under the Foreign Contribution (Regulation) Act, 2010, the RBI also said that recipients can receive foreign contribution in a single account only.
“The Act provides that persons having definite cultural, economic, educational, religious and social programmes should get themselves registered with the government of India before accepting any ‘foreign contribution’.”
“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,” said the guidelines. Under the Act, foreign contribution means “donation, delivery or transfer made by a foreign source of any article (not being an article of gift for personal use, the market value of which is not more than the specified amount), currency (whether Indian or foreign) or any security”.
The apex bank said, with the coming into force of the new Act, the old Foreign Contribution (Regulation) Act, 1976, stands repealed.
“The central government is empowered to prohibit any person or organisation not specified in the Act from accepting any foreign contribution and to require any person or class of persons, not specified in it to obtain prior permission of the central government before accepting any foreign hospitality,” the guidelines said.
According to the Act, some obligations have been put on banks in relation to the receipt of foreign contributions. Entities which were granted certificates of registration or prior permission under the Foreign Contribution (Regulation) Act, 1976, will continue to be eligible to receive foreign contribution under the new rules and such registration shall be valid for a period of five years.
The RBI, however, added that the Foreign Contribution (Regulation) Act, 2010, prohibits certain entities from receiving foreign contribution.
It also restricts “certain classes of persons from accepting foreign hospitality while visiting any country or territory outside India, without the prior permission of the central government”. Among those prohibited from accepting such contributions are candidates contesting polls, media persons, judges, government servants or employees of any entity controlled or owned by government, members of any legislature, political parties and their office bearers and organisations of a political nature.
Foreign contribution can however be accepted by such entities in the form of salary or other remuneration or as business transaction, as gifts or presents during foreign tours as part of official delegation. They can also received them if given by relatives or received as remittance in course of business and through scholarship or stipend payment.