10 October 2011
The Bank has issued FIRC for funds received for transfer of shares and is asking back the original FIRC along with Form FC TRS. The Bank is not forwarding the Form FCTRS to RBI unless origial FIRC is returned back to the Bank. Can the Bank ask back the FIRC issued or can it be retained by the receiver of funds. What course of action can be taken if the form is not forwarded by the Bank
1. **Retention of FIRC**: Generally, the Foreign Inward Remittance Certificate (FIRC) is issued by the bank to the recipient of funds to acknowledge receipt of foreign exchange. The recipient (you) can usually retain the original FIRC for your records. It serves as proof that the funds were received from overseas.
2. **Form FC TRS**: Form FC TRS (Foreign Currency Transfer of Shares) is a form used to report transfer of shares between a resident and a non-resident. This form, along with supporting documents (including FIRC), needs to be submitted to the Reserve Bank of India (RBI) for regulatory compliance.
3. **Bank's Request for Original FIRC**: The bank's request to return the original FIRC might stem from their internal process or regulatory requirements to facilitate their reporting obligations to RBI. Banks sometimes need the original documents to validate the transactions they report to regulatory authorities.
4. **Course of Action if Form FC TRS is not Forwarded by the Bank**: If the bank is not forwarding the Form FC TRS to RBI due to the non-return of the original FIRC, you should communicate with the bank to understand their specific requirements and the reason for their delay. Here are steps you can consider:
- **Clarify with the Bank**: Contact the bank and seek clarification on why they require the original FIRC and why they haven't forwarded the Form FC TRS. Understand their process and if there are any alternative arrangements possible.
- **Alternative Documentation**: Check if there are alternatives to submitting the original FIRC (such as certified copies or notarized copies) that the bank might accept for their internal processing.
- **Escalate if Necessary**: If the bank's requirements seem unusual or if they are not cooperating, escalate the matter internally within the bank to a higher authority or compliance department. Sometimes, senior officials can provide clarity or approve alternatives.
- **Regulatory Guidance**: If needed, seek guidance from RBI or a financial/legal advisor who specializes in foreign exchange transactions. They can provide insights into the regulatory requirements and possible courses of action.
In summary, while you generally have the right to retain the original FIRC as proof of funds received, banks may have their own compliance procedures that require them to retain or validate original documents for regulatory reporting. Clear communication with the bank and understanding their specific requirements is crucial in resolving this issue.
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