NGOs may receive “foreign contributions” for the time being in their existing FCRA Bank Account, till 31st March 2021

Ministry of Home Affairs (MHA) has issued a Public Notice dated 13th October, 2020 which will make NGOs breath a deep and much required sigh of relief.

The Public Notice can be read at: https://fcraonline.nic.in/home/PDF_Doc/fc_notice_13102020.pdf

  1. New Delhi Main Branch (NDMB) of State Bank of India (SBI), 11, Sansad Marg, New Delhi -110 001 is where the main designated “FCRA Account” to receive ‘Foreign Contributions’ should be opened.
  2. This Public Notice makes it clear that organisations already registered under or having prior permission under FCRA 2010 and who do not have their designated “FCRA Account” with NDMB of SBI need not panic.
  3. The Central Government has decided to grant sufficient transitioning time (up to 31st March 2021) to such organisations to open the new designated “FCRA Account” with the NDMB of SBI.
  4. Those organisations whose application for registration or prior permission under FCRA 2010 is still pending will also be required to open their designated “FCRA Account” with NDMB of SBI. In other words MHA may not process their application till this requirement is met.
  5. Once the new “FCRA Account” is opened with NDMB of SBI, all foreign contributions must be received in NDMB of SBI only.
  6. However, till such time as “FCRA Account” is opened with NDMB of SBI, NGOs may in the interim or transitioning time, receive foreign funds in their current designated FCRA Bank Account, but only up to 31st March 2021. MHA appears to have also notified all scheduled banks in this regard.
  7. The Public Notice also makes it clear that to open this new “FCRA Account” with NDMB of SBI, the NGOs will not be required to travel to New Delhi.
  8. NGOs may approach the nearest SBI Branch of their choice to open this new designated “FCRA Account”. Standard Operating Procedures (SOP) in this regard will soon be uploaded on MHA’s portal.
  9. The current designated FCRA Bank account may be retained by the NGO as FCRA Utilization Account and can be linked to the new “FCRA Account” with NDMB of SBI.

Conclusion:

  1. MHA has given NGOs reasonable time to make the transition. But, please don’t wait till March 2021 to open the new “FCRA Account” with NDMB of SBI.
  2. NGOs will not be required to travel to New Delhi. Contact the nearest Branch of SBI after a few days to open this new “FCRA Account”. No need to rush.
  3. It is likely that similar relaxation may be provided with regard to cap of 20% of admin expenditure (i.e. it may be made applicable only on and after 1st April 2021).

Sleep peacefully tonight all ye anxious NGOs.

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