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Simhan (manager)     24 March 2022

Transfer of funds from one fcra entity to other fcra registered entiry

Dear Experts,

FCRA Act Under the recent amendment it is prohibited to transfer funds from one FCRA registered entity to another FCRA registered entity

for example,  There are two FC registered Trust entities. A & B.     .  A  deputes its employees who have the expertise to work on project of B  . Hence A raises a debit note on B on the salaries of A's employees and the same is re-imbursed  by B by transferring the funds to A.   Will this amounts to a transfer of Funds from B to A.  Our auditors are of the view that since transfer of funds is prohibited between two FCRA registered entities after Sep ,  it is necessary that no transactions like debit note/credit notes  should be made.   whether expenses incurred by one  FCRA entity on another  will amount to transfer of funds

Whether if B is a non FCRA entiry is it allowed to transfer funds from A ( FCRA registered entity) to B( non FCRA registered entity)

Please clarify as per FCRA act.


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