FCRA

RBI Introduces FCRA-related transaction code in NEFT and RTGS Systems

17 Feb, 2023

The FCRA was enacted with the objective of creating a transparent mechanism for individuals and organizations through the E-governance of FCRA-related activities and discouraging any detrimental activities against national interest. In furtherance of this objective, the RBI, introduced FCRA-related transaction code in NEFT and RTGS Systems on 16th February vide notification RBI/2022-23/178. The present article shall discuss the details of the notification.

What is FCRA?

FCRA is an acronym for Foreign Contribution Regulation Act. It regulates the receipt of foreign contributions or aid from outside India to Indian territories; it is essential to ensure that such assistance doesn’t affect politics or any other situation in India. The compliance of this act is usually complex as it focuses on the genuineness of the donations. This law is enforced by the Ministry of Home Affairs, Government of India which has a separate section to ensure compliance with the Foreign Funding Registration.

What does the RBI Notification Say?

According to the FCRA, 2010^[1] (amended as on September 28, 2020), the receipt of the foreign contributions must be in the “FCRA account” only of SBI NDMB. The receipt of the contributions to the FCRA account must be directly from foreign banks via SWIFT and NEFT, and RTGS systems in the case of Indian intermediary banks.
As per the extant requirements of the Ministry of Home Affairs (MHA), GOI, the details of the donor, such as name, address, country of origin, amount, currency, and purpose of remittance, must be noted in such transactions, and the same must be reported by SBI to MHA on a daily basis.
Considering the above, Apex bank introduced necessary changes in NEFT and RTGS systems. Member banks are advised to incorporate the necessary changes in their core banking/middleware solutions for noting the required details at the time of forwarding the foreign donations via NEFT and RTGS systems to SBI. The instructions will be effectuated from 15.03.23

READ FCRA Amendment Bill 2020- Key Developments

Technical Details related to FCRA Transactions in NEFT and RTGS Systems

The technical Details related to FCRA Transactions in NEFT and RTGS Systems are enumerated below –

A) FCRA Transaction Code in NEFT and RTGS Systems

Originating banks must select the following mandatory fields of NEFT / RTGS systems at the time of remitting foreign donations to the FCRA account at SBI:

Field	Type	Code to be used
6305 (in N06 message)	NEFT	41
PmtTpInf/CtgyPurp/Cd (in Pacs.008 message)	RTGS	FCRA

B) Format for providing Donor Details in 7495 and RmtInf fields of NEFT and RTGS Systems:

Originating banks must pass on donor details in the following formats of ‘Sender to remitter information’ (field no. 7495) of NEFT and ‘RmtInf’ tag of RTGS:

System	Field / Tag	Code to be used	Transaction without Legal Entity Identifier (LEI) details	Transaction with LEI details
NEFT	6305 (in N06 message)	41	Field- 7495 line 1: Donor Address line 2: Donor Address line 3: Name of the Donor line 4: Purpose of the Remittance – Alphanumeric line 5: Country of the Donor – Alphabet line 6: Currency and Amount – Alphanumeric	Field- 7495 line 1: SL/20-digit sender LEI/ line 2: BL/20-digit beneficiary LEI/ line 3: Name of the Donor line 4: Purpose of the Remittance- Alphanumeric line 5: Country of the Donor-Alphabet line 6: Currency and Amount- Alphanumeric
RTGS	PmtTpInf / CtgyPurp / Cd (in Pacs.008 message)	FCRA	Tag- RmtInf/Ustrd loop 1: Name of the donor loop 2: Donor Address loop 3: Purpose of the Remittance- Alphanumeric loop 4: Country of the Donor, currency, and Amount – Alphanumeric	Tag- RmtInf/Ustrd loop 1: /SL/20-digit sender LEI/ loop 2: /BL/20-digit beneficiary LEI/ loop 3: Purpose of the Remittance – Alphanumeric loop 4: Country of the Donor, currency, and Amount – Alphanumeric

Conclusion

The Apex Bank has issued these instructions u/s 10 (2) r/w Section 18 of the Payment and Settlement Systems Act, 2007. The notification so issued can simply the receipt of foreign contributions and ensure the genuineness of the same due to the contributions being received from a safe, secure and trusted payment method like RTGS / NEFT

READ Foreign Contribution Regulations in India

Also Read: Real-Time Gross Settlement System (RTGS)

RTGS-NEFT

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