Is the Bank where you maintain your FCRA Account PFMS Compliant?
Is your Bank PFMS Compliant?
If not, please transfer your FCRA Bank account to one that is PFMS
compliant before 21st January 2018 and intimate the change to Ministry of Home Affairs in the online Form FC 6!
compliant before 21st January 2018 and intimate the change to Ministry of Home Affairs in the online Form FC 6!
MHA’s latest directive
If your NGO/NPO is registered under FCRA 2010 or has prior
permission to receive funds from a foreign source, please ensure that the bank
where you have your FCRA account or FCRA utilization account is compliant with the
Public Financial Management Systems (PFMS)! If not, please close your FCRA
account with the bank and transfer all the FCRA funds to a bank which is PFMS
compliant, before 21st January 2018 and intimate the change to Ministry of Home
Affairs in the online Form FC 6 within 15 days of the change.
permission to receive funds from a foreign source, please ensure that the bank
where you have your FCRA account or FCRA utilization account is compliant with the
Public Financial Management Systems (PFMS)! If not, please close your FCRA
account with the bank and transfer all the FCRA funds to a bank which is PFMS
compliant, before 21st January 2018 and intimate the change to Ministry of Home
Affairs in the online Form FC 6 within 15 days of the change.
Earlier this
year, the Home Ministry had asked around 9,000 NGOs and other entities to open
their accounts in banks having core banking facilities and furnish details for
real-time access to security agencies in case of any discrepancy. The Ministry
of Home Affairs (MHA) has now issued a directive on 21st December
2017 to open and maintain FCRA accounts only in banks, which are integrated
with the Central Government’s Public Financial Management System (PFMS) in
order to ensure “higher level of
transparency” and “hassle-free reporting compliance”.
year, the Home Ministry had asked around 9,000 NGOs and other entities to open
their accounts in banks having core banking facilities and furnish details for
real-time access to security agencies in case of any discrepancy. The Ministry
of Home Affairs (MHA) has now issued a directive on 21st December
2017 to open and maintain FCRA accounts only in banks, which are integrated
with the Central Government’s Public Financial Management System (PFMS) in
order to ensure “higher level of
transparency” and “hassle-free reporting compliance”.
MHA had been
trying to get all banks with FCRA accounts to become PFMS-compliant. However,
with only some of them migrating to PFMS, MHA has decided to take a tougher
stand in this regard and instead of taking the banks to task for not being PFMS
compliant, NGOs/NPOs have been tasked with moving their FCRA accounts to Banks
which are PFMS compliant.
trying to get all banks with FCRA accounts to become PFMS-compliant. However,
with only some of them migrating to PFMS, MHA has decided to take a tougher
stand in this regard and instead of taking the banks to task for not being PFMS
compliant, NGOs/NPOs have been tasked with moving their FCRA accounts to Banks
which are PFMS compliant.
Click here to read the full text of MHA’s Notice dated 21st
December 2017
December 2017
Click here to see the list of 32 PFMS compliant banks issued by
MHA
MHA
What is Public Financial Management System (PFMS)?
The Public
Financial Management System (PFMS), earlier known as Central Plan Schemes
Monitoring System (CPSMS), is a web-based online software application developed
and implemented by the Office of Controller General of Accounts (CGA).
Financial Management System (PFMS), earlier known as Central Plan Schemes
Monitoring System (CPSMS), is a web-based online software application developed
and implemented by the Office of Controller General of Accounts (CGA).
PFMS was
initially started during 2009 as a Central Sector Scheme of the Planning
Commission with the objective of tracking funds released under all Plan schemes
of Government of India, and real time reporting of expenditure at all levels of
Programme implementation. Subsequently in the year 2013, the scope was enlarged
to cover direct payment to beneficiaries under both Plan and non-Plan Schemes.
initially started during 2009 as a Central Sector Scheme of the Planning
Commission with the objective of tracking funds released under all Plan schemes
of Government of India, and real time reporting of expenditure at all levels of
Programme implementation. Subsequently in the year 2013, the scope was enlarged
to cover direct payment to beneficiaries under both Plan and non-Plan Schemes.
The primary
objective of PFMS is to facilitate sound Public Financial Management System for
the Government of India by establishing an efficient fund flow system as well
as a payment cum accounting network. PFMS provides various stakeholders with
real time, reliable and meaningful management information system and an
effective decision support system, as part of the Digital India initiative of
the Government of India.
objective of PFMS is to facilitate sound Public Financial Management System for
the Government of India by establishing an efficient fund flow system as well
as a payment cum accounting network. PFMS provides various stakeholders with
real time, reliable and meaningful management information system and an
effective decision support system, as part of the Digital India initiative of
the Government of India.
MHA should Regulate NOT Control
The role of
legislation is to regulate and not control. The Act itself is titled ‘Foreign
Contribution Regulation Act and it
is intended to “regulate the
acceptance and utilization of foreign contribution”. However, historically, MHA
has consistently tried to control NGOs and their activities and funding for
such activities rather than simply regulate compliance within the framework of
the statute. In recent history it has mandated requirement of ‘Darpan UID’ without which NGOs would not
be able to use any FCRA online service and now it has mandated FCRA Bank
accounts can be maintained only with PFMS compliant Banks.
legislation is to regulate and not control. The Act itself is titled ‘Foreign
Contribution Regulation Act and it
is intended to “regulate the
acceptance and utilization of foreign contribution”. However, historically, MHA
has consistently tried to control NGOs and their activities and funding for
such activities rather than simply regulate compliance within the framework of
the statute. In recent history it has mandated requirement of ‘Darpan UID’ without which NGOs would not
be able to use any FCRA online service and now it has mandated FCRA Bank
accounts can be maintained only with PFMS compliant Banks.
We are not
against the principle or the need for “higher level of transparency” among
NGOs. In fact we are all for it and would encourage it. But, why is “higher
level of transparency” not reciprocated by the government towards NGOs and
Civil Society Organisations? In most cases when registration or prior
permission is not granted or an existing registration is suspended or revoked,
no transparency of high or low level is exercised. Decisions are often taken
arbitrarily and no cogent argument is provided to support MHA’s stand.
against the principle or the need for “higher level of transparency” among
NGOs. In fact we are all for it and would encourage it. But, why is “higher
level of transparency” not reciprocated by the government towards NGOs and
Civil Society Organisations? In most cases when registration or prior
permission is not granted or an existing registration is suspended or revoked,
no transparency of high or low level is exercised. Decisions are often taken
arbitrarily and no cogent argument is provided to support MHA’s stand.
It is indeed
tragic that many within the government system view NGOs and other such civil
society organisations as a threat to India’s sovereignty and mainly as entities
supported by foreign agencies with a view to destabilize the government or it’s
functioning.
tragic that many within the government system view NGOs and other such civil
society organisations as a threat to India’s sovereignty and mainly as entities
supported by foreign agencies with a view to destabilize the government or it’s
functioning.
Decrease by over fifty percent in foreign funding
In fact, just
recently, Union Minister of State for Home Kiren Rijiju informed Parliament
that the registrations of 18,868 NGOs have been cancelled between the years
2011 and 2017 for violating the law. Following this action, foreign funding to
Indian NGOs has also come down drastically, from Rs 17,773 crore during the
financial year 2015-16 to Rs 6,499 crore during the financial year 2016-17.
recently, Union Minister of State for Home Kiren Rijiju informed Parliament
that the registrations of 18,868 NGOs have been cancelled between the years
2011 and 2017 for violating the law. Following this action, foreign funding to
Indian NGOs has also come down drastically, from Rs 17,773 crore during the
financial year 2015-16 to Rs 6,499 crore during the financial year 2016-17.
Rijiju has also
stated that the quantum of foreign funding received by NGOs in India in the
last three years were: Rs 15,299 crore during financial year 2014-15, Rs 17,773
crore during financial year 2015-16 and Rs 6,499 crore during the financial
year 2016-17. This is more than a fifty per cent decrease in foreign funding
within a span of just three years.
stated that the quantum of foreign funding received by NGOs in India in the
last three years were: Rs 15,299 crore during financial year 2014-15, Rs 17,773
crore during financial year 2015-16 and Rs 6,499 crore during the financial
year 2016-17. This is more than a fifty per cent decrease in foreign funding
within a span of just three years.
Currently, just around
10,000 FCRA-registered NGOs are reported to be operating in India. Barely two
years ago, statistics indicated four times the numbers! Even assuming
that fifty per cent of the over 40,000 FCRA registered associations were
defunct, the current statistics still indicate a fifty percent drop in the
numbers.
10,000 FCRA-registered NGOs are reported to be operating in India. Barely two
years ago, statistics indicated four times the numbers! Even assuming
that fifty per cent of the over 40,000 FCRA registered associations were
defunct, the current statistics still indicate a fifty percent drop in the
numbers.