MHA relaxes account norms for NGOs under the Foreign Contribution Regulation Act
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The union home ministry relaxed the norms for NGOs mandated to maintain FCRA account with the State Bank of India (SBI) under Foreign Contribution Regulation Act (FCRA). In a 5-page-order, MHA stated, “The “FCRA Account” holder shall have complete freedom to transfer the foreign contribution (FC) received in “FCRA Account” opened in SBI to another “FCRA Account.”
The SOPs further noted that SBI main branch at New Delhi (NDMB) will not levy any charges or fees on any transfer of foreign contribution from the “FCRA Account” to “another FCRA Account”, if any, and to utilization account, if any, of the entity or NGOs. “For each such transfer, the “FCRA Account” holder to be informed through an e-mail as well as SMS immediately,” it added.
The home ministry has set a deadline of March 31, 2021 for NGOs registered under FCRA to open an account at the specified branch of SBI. “From the date of opening of “FCRA Account” in NDMB or from 31.03.2021, whichever is earlier, no inward remittance will be allowed in any account other than that opened in NDMB,” the MHA’s order stated. However, it allowed NGOs to maintain their existing FCRA Accounts for keeping or utilization purposes.
For SBI, the home ministry in its order said, bank will “allow receipt of foreign contribution only in the “FCRA Account” after confirming that the MHA has already granted a certificate or prior permission”. Besides FCRA accounts details, the NDMB will be required to obtain name of the beneficiary, name, account number, address and country of residence of donors. NGOs getting foreign donation will be required to submit an undertaking detailing the purpose of the receipt of funds as per FEMA declaration and RBI guidelines to the SBI Branch, according to MHA.
The 2020 amendment into FCRA, 2010 was cleared by both the houses of Parliament during the monsoon session and came into existence from September 29, 2020. As per the 2020 Act, the limit of administrative expenses have been reduced from fifty percent to twenty percent and made it mandatory for NGOs to provide Aadhaar number of all its office bearers, directors and other key functionaries, copy of the passport or Overseas Citizen of India (OCI) card, in case a foreign national is on board or member of the NGO, as per FCRA 2020.
The SOPs further noted that SBI main branch at New Delhi (NDMB) will not levy any charges or fees on any transfer of foreign contribution from the “FCRA Account” to “another FCRA Account”, if any, and to utilization account, if any, of the entity or NGOs. “For each such transfer, the “FCRA Account” holder to be informed through an e-mail as well as SMS immediately,” it added.
The home ministry has set a deadline of March 31, 2021 for NGOs registered under FCRA to open an account at the specified branch of SBI. “From the date of opening of “FCRA Account” in NDMB or from 31.03.2021, whichever is earlier, no inward remittance will be allowed in any account other than that opened in NDMB,” the MHA’s order stated. However, it allowed NGOs to maintain their existing FCRA Accounts for keeping or utilization purposes.
For SBI, the home ministry in its order said, bank will “allow receipt of foreign contribution only in the “FCRA Account” after confirming that the MHA has already granted a certificate or prior permission”. Besides FCRA accounts details, the NDMB will be required to obtain name of the beneficiary, name, account number, address and country of residence of donors. NGOs getting foreign donation will be required to submit an undertaking detailing the purpose of the receipt of funds as per FEMA declaration and RBI guidelines to the SBI Branch, according to MHA.
The 2020 amendment into FCRA, 2010 was cleared by both the houses of Parliament during the monsoon session and came into existence from September 29, 2020. As per the 2020 Act, the limit of administrative expenses have been reduced from fifty percent to twenty percent and made it mandatory for NGOs to provide Aadhaar number of all its office bearers, directors and other key functionaries, copy of the passport or Overseas Citizen of India (OCI) card, in case a foreign national is on board or member of the NGO, as per FCRA 2020.
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