DBOD.No. BP.BC.19/21.01.023/98

March 10, 1998

Phalguna 19, 1919 (Saka)

The Chairmen and Managing Directors/ Chief Executives of

All Commercial Banks


Dear Sir,

Receipt of foreign contributions by various Associations/Organisations in India under Foreign Contribution (Regulation) Act, 1976


Please refer to our letters Nos. DBOD. BP.BC. 16/21.01.023/96 dated 16th February 1996 & DBOD. BP. 2777/21.01.023/97 dated 23rd May 1997 advising banks that foreign contributions should not be credited to the Accounts of Associations/Organisations unless they have obtained registration or prior permission under FC(R) Act, 1976. The banks were also advised to submit a Return furnishing details of the foreign contributions credited to the Accounts of Organisations/Associations on a half-yearly basis to Government of India, Ministry of Home Affairs, within a period of two months from the closure of the half-yearly period.

2. It has been brought to our notice by Government of India that in spite of repeated instructions issued to banks by the RBI, some of the banks have credited the foreign contributions to the Accounts of Organisations/Associations without the requisite permission of the Central Government. Also the requirement of filing half yearly Returns is not being strictly adhered to by most of the banks. In the absence of these Returns, the Government find it very difficult to keep a watch on the inflow of foreign contributions, in violation of the provisions of the said Act.

3. We, therefore, reiterate the instructions contained in our abovementioned letters and advise that the banks should scrupulously follow these instructions. While granting registration or prior permission, the Ministry of Home Affairs, Government of India invariably endorses a copy thereof to the concerned branch of the bank. As such, no credits of foreign contributions should be allowed in the Accounts of Organisations/Associations unless an order to this effect is received by the branches from the Government. Further, the half yearly Returns as on 31st March & 30th September of every year should invariably be forwarded to Government within the stipulated period of two months of the closure of the half year.

4. It may please be noted that non-adherence to these instructions resulting in violations of the provisions of the said Act or non submission of timely Returns to Government of India would be viewed seriously by us.

5. The contents of this Circular should be brought to the notice of all your offices/branches for immediate compliance and a copy of the advice issued to your branches in this regard may be sent to us for our information and record.

Yours faithfully,

(A.L. Sinhmar)

Deputy General Manager