Page 46 - Banking Finance May 2022

ARTICLE

Its applicability extends to whole of India, and country or foreign entity (includes company,
also applies to corporations, trusts, societies or other associations of
individuals registered in foreign country);
a. Citizens of India who are outside India.
g. A foreign trust or foreign foundation and includes trust
b. Associate branches or subsidiaries, outside India, of
or foundation mainly financed by a foreign country and;
companies or bodies corporate, registered or
incorporated in India. h. Citizen of a foreign country.
i. Foreign Trade Union, Society, Club or Other Association.
Foreign Contribution means donation, delivery,
or transfer made by any foreign source of:- Note: Amount received from a non-resident Indian citizen
in foreign currency, would not be treated as foreign source.
a. Any article other than personal gifts of market value
not exceeding such sum as may be specified by the Restrictions on Accepting FC
Central Government.
The person having a definite cultural, economic,
b. Any currency whether Indian or foreign.
educational, religious or social programme can
c. Any security including foreign security.
accept FC, only if:
This will also cover: a. It is registered with the Central Government under this
Act or takes prior permission before receiving each
a. Contribution received from any person who has in turn
contribution.
received it from a foreign source
b. It receives FC only through one designated bank
b. Interest accrued on FC deposited in the bank
account.
However, any amount received, by any person from any c. Central Government is kept intimated as to the amount,
foreign source in India, by way of fee (including fees charged source and manner in which FC was received and
by an educational institution in India from foreign student) utilised.
or towards cost in lieu of goods or services rendered by such
person in the ordinary course of business, trade or Prior Permission
commerce, whether within India or outside India, shall be a. Application for prior approval to be made in Form FC 4.
excluded from the definition of foreign contribution.
b. Prior approval to be donor specific, done specific and
purpose specific.
Foreign Source includes
a. Government of any foreign country or any agency of Registration of the Association
such government;
a. Application for registration shall be submitted
b. Any international agency except United Nations or any electronically in Form FC 3. Duly signed hard copy of the
of its specialised agencies, World Bank, International same along with relevant documents is also to be
Monetary Fund or such other agency as the Central submitted within 30 days.
Government may, by notification in the Official Gazette,
b. Registration granted shall be valid for 5 years from the
specify;
date of its issue.
c. Foreign company;
c. Application for renewal to be made in Form FC 5, six
d. Corporation, other than foreign company, incorporated months before the date of expiry of the certificate
outside India;
d. Act provides that registration may be granted, ordinarily
e. A multinational corporation; within 90 days from the date of receipt of application,

f. A company where more than 50% of its share capital is however practical experience is that the process takes
held by a foreign government or citizens of a foreign much longer.

46 | 2022 | MAY | BANKING FINANCE