The Reserve Bank of India (RBI) has asked member banks participating in payment systems to tweak their core banking/middleware solutions to capture the requisite details while forwarding the foreign donations through NEFT and RTGS systems to State Bank of India(SBI).
National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement System (RTGS) are payment systems.
Originating banks are required to select two mandatory fields of NEFT/RTGS systems while remitting foreign donations to the Foreign Contribution (Regulation) Act (FCRA) account at SBI.
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Further, originating banks are required to pass on donor details relating to “transaction without Legal Entity Identifier (LEI) details” and “transaction without LEI details” as part of ‘Sender to remitter information’ in NEFT and RTGS.
RBI said the aforementioned instructions will be effective from March 15, 2023.
Under the FCRA, 2010 (amended as on September 28, 2020), foreign contributions must be received only in the “FCRA account” of SBI, New Delhi Main Branch.
The contributions to the FCRA account are received directly from foreign banks through SWIFT and from Indian intermediary banks through NEFT and RTGS systems.
In terms of extant requirements of Ministry of Home Affairs (MHA), Indian government, 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 MHA on daily basis.