MHA asks defaulting associations to validate their FCRA designated bank account
MHA asks defaulting associations to validate their
FCRA designated bank account
FCRA designated bank account
“Government puts 1,200 NGOs on notice”
screams a headline in ‘The Hindu’.
screams a headline in ‘The Hindu’.
The report states: “The Home Ministry has sent notices to over
1,200 NGOs, asking them to validate the designated bank accounts in which they
receive foreign contribution, failure of which will invite punitive action”.
1,200 NGOs, asking them to validate the designated bank accounts in which they
receive foreign contribution, failure of which will invite punitive action”.
To read the full article, please go
to:
to:
The
Times of India has carried a similar report with the
headline stating: “Government asks 1,222 NGOs to
validate bank accounts”.
Times of India has carried a similar report with the
headline stating: “Government asks 1,222 NGOs to
validate bank accounts”.
To read the full article, please go
to:
to:
At CAP we have been receiving a number
of queries from anxious NGOs already registered under FCRA 2010, wanting to
know if they need to do anything or stay vigilant about.
of queries from anxious NGOs already registered under FCRA 2010, wanting to
know if they need to do anything or stay vigilant about.
In our opinion the Circular dated 8th
September 2017 issued by the Ministry of Home Affairs (MHA) is quite clear and
self-explanatory.
September 2017 issued by the Ministry of Home Affairs (MHA) is quite clear and
self-explanatory.
To read MHA’s circular please click on
the following link:
the following link:
CAP’s
Advisory
Advisory
It is important to understand that all
that MHA has asked defaulting NGOs to do is validate their designated FCRA Bank
account details.
that MHA has asked defaulting NGOs to do is validate their designated FCRA Bank
account details.
There are several instances of NGOs
who receive funds from foreign source/s directly into their FCRA Utilization
Accounts instead of the main designated FCRA Bank Account. In several other
cases NGOs have failed to provide MHA with details of their FCRA Utilization
Accounts. All this and more should be checked, verified and updated (if
required) by every registered organization using online Form FC 6.
who receive funds from foreign source/s directly into their FCRA Utilization
Accounts instead of the main designated FCRA Bank Account. In several other
cases NGOs have failed to provide MHA with details of their FCRA Utilization
Accounts. All this and more should be checked, verified and updated (if
required) by every registered organization using online Form FC 6.
Use
this simple three step check list
this simple three step check list
1.
Do you have only
one designated FCRA Bank account?
Do you have only
one designated FCRA Bank account?
If
yes, please ensure that the name of the bank, branch and account number is the
same as on your FCRA registration certificate.
yes, please ensure that the name of the bank, branch and account number is the
same as on your FCRA registration certificate.
Also,
go to FCRA online and click on Form FC6 to check if the bank and other details
therein match and are up to date.
go to FCRA online and click on Form FC6 to check if the bank and other details
therein match and are up to date.
2.
If you have a
designated FCRA Bank account do you also have Utilization Bank Accounts?
If you have a
designated FCRA Bank account do you also have Utilization Bank Accounts?
If
yes, please ensure that all foreign contributions are first received in your
main designated FCRA account and only after that amounts are moved to your
“FCRA linked Utilization bank account/s”
yes, please ensure that all foreign contributions are first received in your
main designated FCRA account and only after that amounts are moved to your
“FCRA linked Utilization bank account/s”
Also,
once again, go to FCRA online and click on Form FC6 to check if all the
utilization bank account/s and other details are up to date.
once again, go to FCRA online and click on Form FC6 to check if all the
utilization bank account/s and other details are up to date.
3.
Finally, please
check whether your FCRA Bank account is with a Scheduled Bank having core
banking facilities?
Finally, please
check whether your FCRA Bank account is with a Scheduled Bank having core
banking facilities?
Most
Nationalized Banks and Private Banks qualify under both.
Nationalized Banks and Private Banks qualify under both.
What
is FCRA linked Utilization Account?
is FCRA linked Utilization Account?
Generally, FCRA Utilization
account or accounts may be opened under two circumstances.
account or accounts may be opened under two circumstances.
Situation 1. Let us assume the NGO is
registered in Mumbai and has its main FCRA Bank account with the State Bank of
India, Fort Branch in Mumbai.
registered in Mumbai and has its main FCRA Bank account with the State Bank of
India, Fort Branch in Mumbai.
Now let us also assume that this
NGO runs projects and programs in Nashik and Sholapur and these projects are
funded by foreign contributions. There are project staff and regular activities
at both these places. Payments also need to be regularly made at both these
places.
NGO runs projects and programs in Nashik and Sholapur and these projects are
funded by foreign contributions. There are project staff and regular activities
at both these places. Payments also need to be regularly made at both these
places.
Under the circumstances, the NGO
may open an FCRA linked Project Utilization Bank Account in Nashik and
Sholapur. This should preferably be with the same Bank (in this case, State
Bank) and with clear instructions to the main Bank as also the banks in Nashik
and Sholapur that this is an FCRA linked Utilization Account.
may open an FCRA linked Project Utilization Bank Account in Nashik and
Sholapur. This should preferably be with the same Bank (in this case, State
Bank) and with clear instructions to the main Bank as also the banks in Nashik
and Sholapur that this is an FCRA linked Utilization Account.
No local money
should be deposited in these utilization accounts and when the utilization
accounts are closed all the funds from these accounts should be transferred to
the main designated FCRA Bank account.
should be deposited in these utilization accounts and when the utilization
accounts are closed all the funds from these accounts should be transferred to
the main designated FCRA Bank account.
Situation 2. Now, let us assume that a
foreign donor / grant maker (let’s assume XYZ Foundation USA) insists that the
entire donation / grant should be maintained by NGO ABC in a separate Bank
account. This is now quite a common request from funders.
foreign donor / grant maker (let’s assume XYZ Foundation USA) insists that the
entire donation / grant should be maintained by NGO ABC in a separate Bank
account. This is now quite a common request from funders.
Once again funds from XYZ
Foundation must be first credited to the designated FCRA Bank account and then
moved to a Utilization Account, once again preferably with the same bank marked
“NGO ABC – XYZ Foundation – FCRA Utilization Account”.
Foundation must be first credited to the designated FCRA Bank account and then
moved to a Utilization Account, once again preferably with the same bank marked
“NGO ABC – XYZ Foundation – FCRA Utilization Account”.
What is an FCRA Utilisation account?
We have only one FCRA Account and receive foreign funds into that. And we spend from that according to our purpose. We have listed the same account in the FCRA site as our main account and utilization account