RBI for check on flow of foreign funds to charities
The RBI has invited comments by December 21 on the draft instructions on vostro accounts - a tool for transferring funds by people abroad. Business Humour
By PTI |
MUMBAI: The Reserve Bank is proposing to ban transfer of overseas funds to charitable institutions through 'vostro' accounts, as it seeks to plug money laundering.
"Under no circumstances, donations/contributions to charitable institutions should be routed through the Exchange Houses," the RBI said in its draft regulations for opening rupee/foreign exchange currency vostro accounts of non- resident exchange houses.
The RBI has invited comments by December 21 on the draft instructions on vostro accounts - a tool for transferring funds by people abroad through authorised dealers (ADs).
The persons remitting and beneficiary of fund transfer through the vostro accounts should be individuals, the draft regulations said, adding that the remittances for financing trade transactions should not exceed Rs 2,00,000 per transaction.
The draft guidelines further said that the ADs should adhere to the Know Your Customer (KYC) guidelines issued by the central banks while undertaking any transactions under the rupee/foreign currency drawing arrangements with overseas entities.
The ADs, it further said, should undertake due diligence in respect of remittances received under the vostro mechanism to ensure that "regulations relating to money laundering are complied with scrupulously".
"Under no circumstances, donations/contributions to charitable institutions should be routed through the Exchange Houses," the RBI said in its draft regulations for opening rupee/foreign exchange currency vostro accounts of non- resident exchange houses.
The RBI has invited comments by December 21 on the draft instructions on vostro accounts - a tool for transferring funds by people abroad through authorised dealers (ADs).
The persons remitting and beneficiary of fund transfer through the vostro accounts should be individuals, the draft regulations said, adding that the remittances for financing trade transactions should not exceed Rs 2,00,000 per transaction.
The draft guidelines further said that the ADs should adhere to the Know Your Customer (KYC) guidelines issued by the central banks while undertaking any transactions under the rupee/foreign currency drawing arrangements with overseas entities.
The ADs, it further said, should undertake due diligence in respect of remittances received under the vostro mechanism to ensure that "regulations relating to money laundering are complied with scrupulously".
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