Govt extends deadline for NGOs opening new FCRA accounts with SBI till June 30
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Following multiple petitions by NGOs in various courts stating that the poor implementation of the recently amended Foreign Contribution Regulation Act (FCRA) had tied their hands in the middle of the Covid-19 pandemic, the government has extended the deadline for conforming to the new rules to June 30.
The amended FCRA has made it mandatory for all NGOs receiving foreign aid to open an account in State Bank of India’s New Delhi branch and the government, through an order in October 2020, had fixed the deadline as March 31. This has now been extended to June 31 after NGOs argued in court that the delay in regularising these accounts was on part of SBI and the Ministry of Home Affairs (MHA) and not by the organisations.
The NGOs had argued in court that the process to open the accounts was so cumbersome that despite a large number of the organisations applying with SBI before the due date, they had not been opened and the necessary approvals from the MHA had not arrived. This had resulted in them being unable to receive foreign funds for over a month, severely impacting their Covid relief work. A petition filed in the Delhi High Court had demanded a moratorium of six months.
Elaborating how complex and prone to delay the process is, one of the petitions said, “Even though the Petitioner applied for opening of an SBI Account on 25 March 2021, and cleared all discrepancies in its documents as raised by Respondent No. 2, the Petitioner did not receive an FCRA account opening letter from SBI. This letter is required to apply for the FC6C certificate of approval by Respondent No. 1 MHA. Therefore, the Petitioner through its President sent a reminder e-mail to the Respondent No. 2 on 3 May 2021. However, no e-mail response has been forthcoming from Respondent No. 2. Now, even though all documents have been submitted, the Petitioner’s account is not yet opened.”
Several NGOs have the same issue. Many organisations have been waiting for an approval of the Form FC-6C for more than a month even after the new bank accounts were successfully opened, and they don’t have any indication of when the approval will come, sources said.
An MHA order on Wednesday said, “Keeping in view the exigencies arising out of COVID19 situation and to ensure smooth transition to the amended FCRA regime …the existing FCRA account holders have to now open the ‘FCRA Account’ in the New Delhi Main Branch (NDMB) of the State Bank of India, 11 Sansad Marg, New Delhi 110001 up to 30th June, 2021 or earlier. After that date they shall not be eligible to receive FC (foreign contribution) in any account other than the ‘FCRA Account’ opened at the NDMB.”
The order also made it clear that such NGOs who have already opened the account and have got the requisite permission to receive foreign aid in these accounts shall henceforth receive foreign aid only in these newly-opened accounts.
The order, however, has not enthused the NGOs. Advocate Abishek Jebraj, representing some of the organisations in Delhi High Court, said the moratorium of 40 days granted by MHA was too little.
“Given how long drawn the whole process is and how the SBI and the Ministry have not been able to streamline the process in the past six months, I fail to see how everything will get done in 40 days when ministries are running on low attendance and there is full to partial lockdown in various states. Either the ministry should simplify the process or give more time,” Jebraj said.
He added that as many as 14 NGOs will be petitioning Delhi High Court on Thursday over the issue.
The executive of an NGO said, “Grassroots NGOs that have good connections in the community and NGOs working on issues of public health in remote areas, urban slums etc could play a very powerful role in stemming the spread of the pandemic. In fact, many are already doing so. But without support, the efforts might begin to fade. Also, to support people who are moderately ill or help severely ill people to get to hospitals, NGOs can play a significant role. The National Disaster Management Authority, chaired by the PM, has itself enlisted NGOs to work in close coordination to handle the situation.”
The amended FCRA has made it mandatory for all NGOs receiving foreign aid to open an account in State Bank of India’s New Delhi branch and the government, through an order in October 2020, had fixed the deadline as March 31. This has now been extended to June 31 after NGOs argued in court that the delay in regularising these accounts was on part of SBI and the Ministry of Home Affairs (MHA) and not by the organisations.
The NGOs had argued in court that the process to open the accounts was so cumbersome that despite a large number of the organisations applying with SBI before the due date, they had not been opened and the necessary approvals from the MHA had not arrived. This had resulted in them being unable to receive foreign funds for over a month, severely impacting their Covid relief work. A petition filed in the Delhi High Court had demanded a moratorium of six months.
Elaborating how complex and prone to delay the process is, one of the petitions said, “Even though the Petitioner applied for opening of an SBI Account on 25 March 2021, and cleared all discrepancies in its documents as raised by Respondent No. 2, the Petitioner did not receive an FCRA account opening letter from SBI. This letter is required to apply for the FC6C certificate of approval by Respondent No. 1 MHA. Therefore, the Petitioner through its President sent a reminder e-mail to the Respondent No. 2 on 3 May 2021. However, no e-mail response has been forthcoming from Respondent No. 2. Now, even though all documents have been submitted, the Petitioner’s account is not yet opened.”
Several NGOs have the same issue. Many organisations have been waiting for an approval of the Form FC-6C for more than a month even after the new bank accounts were successfully opened, and they don’t have any indication of when the approval will come, sources said.
An MHA order on Wednesday said, “Keeping in view the exigencies arising out of COVID19 situation and to ensure smooth transition to the amended FCRA regime …the existing FCRA account holders have to now open the ‘FCRA Account’ in the New Delhi Main Branch (NDMB) of the State Bank of India, 11 Sansad Marg, New Delhi 110001 up to 30th June, 2021 or earlier. After that date they shall not be eligible to receive FC (foreign contribution) in any account other than the ‘FCRA Account’ opened at the NDMB.”
The order also made it clear that such NGOs who have already opened the account and have got the requisite permission to receive foreign aid in these accounts shall henceforth receive foreign aid only in these newly-opened accounts.
The order, however, has not enthused the NGOs. Advocate Abishek Jebraj, representing some of the organisations in Delhi High Court, said the moratorium of 40 days granted by MHA was too little.
“Given how long drawn the whole process is and how the SBI and the Ministry have not been able to streamline the process in the past six months, I fail to see how everything will get done in 40 days when ministries are running on low attendance and there is full to partial lockdown in various states. Either the ministry should simplify the process or give more time,” Jebraj said.
He added that as many as 14 NGOs will be petitioning Delhi High Court on Thursday over the issue.
The executive of an NGO said, “Grassroots NGOs that have good connections in the community and NGOs working on issues of public health in remote areas, urban slums etc could play a very powerful role in stemming the spread of the pandemic. In fact, many are already doing so. But without support, the efforts might begin to fade. Also, to support people who are moderately ill or help severely ill people to get to hospitals, NGOs can play a significant role. The National Disaster Management Authority, chaired by the PM, has itself enlisted NGOs to work in close coordination to handle the situation.”
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