Are all NPOs/NGOs required to register on NGO Darpan?

Since quite some time, banks where NGOs/NPOs have their savings or current account have been asking them to provide details of their Unique Identification Number (UIN) with Niti Aayog’s NGO Darpan.  Earlier, all NGOs/NPOs registered under or having prior permission under FCRA 2010 or receiving government grants were mandated to register on Niti Aayog’s NGO Darpan portal and obtain a unique identification number. However, NGO Darpan registration is now applicable to all NGOs/NPOs and onus of ensuring such registration has now been placed on banks.

Amendment to Rules under PMLA

Ministry of Finance (Department of Revenue) vide Notification S.O. 1074(E), dated 7^th March, 2023 in exercise of the powers conferred by Section 73 of the Prevention of Money-laundering Act (PMLA), 2002 (15 of 2003), has amend the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 and accordingly:

“Non-profit organization” now means “any entity or organization, constituted for religious or charitable purposes referred to in clause (15) of section 2 of the Income-tax Act, 1961 (43 of 1961), that is registered as a trust or a society under the Societies Registration Act, 1860 (21 of 1860) or any similar State legislation or a Company registered under the section 8 of the Companies Act, 2013 (18 of 2013).”

Further, “Every Banking Company or Financial Institution or intermediary, as the case may be, shall register the details of a client, in case of client being a non-profit organization, on the Darpan Portal of Niti Aayog, if not already registered, and maintain such registration records for a period of five years after the business relationship between a client and a reporting entity has ended or the account has been closed, whichever is later.”

Impact of the amendment

1. The Prevention of Money Laundering Act, 2002 (PMLA), passed in line with the Financial Action Task Force (FATF) recommendations, aims to prevent and penalize money laundering. Besides individuals, the money laundering laws are now also applicable to all NGOs/NPOs established for ‘charitable purpose’ as provided under section 2(15) of the Income tax Act 1961.
2. Registering on the NGO Darpan portal will allow all relevant information in respect of the NGOs/NPOs to be easily accessible through a centralized database.
3. Onus of ensuring such registration on DARPAN portal has now been placed on banks and financial institutions handling financial transactions of NGOs. Thus, even if the NGO/NPO is not registered under FCRA and does not receive any government grant, the bank will require NGOs/NPOs to register on the Darpan Portal of Niti Aayog and provide the unique identification number.