FCRA Bank Account Opening
FCRA Bank Account Opening
The Central Government, in a notice dated the 21st of December, 2017, directed all Non-Governmental Organizations (NGOs), business entities and individuals who are covered under the ambit of FCRA 2010 to open their bank accounts with any of the banks which has integrated its system with the Public Financial Management System (PMFS). It also notified that the process must be completed within a month of the publication of the notice. In this article, we look at the requirement posted by the Government for FCRA bank account opening in detail.
The Foreign Contribution Regulation Act, 2010
The Foreign Contribution Regulation Act, 2010 is a consolidating Act which was enacted with the object of regulating the acceptance and utilization of foreign contribution or hospitality by certain individuals, associations or companies. Also, it seeks to prohibit the acceptance and utilization of foreign contribution or hospitality for any activities which are detrimental to relevant matters, which includes national interests.
Apart from the above functions, the Act monitors foreign funding for NGO’s, whose valued endeavours hinges on the donations of both foreign and domestic sources.
The Initiative and its Purpose
NGOs, companies and individuals were required to open foreign contribution account in banks integrated with central PFMS to inculcate a high level of transparency and pave the way for a hassle-free reporting compliance.
The following PFMS integrated banks have been designated for this purpose:
- Abu Dhabi Commercial Bank
- ICICI Bank
- The Cosmos Co-operative Bank
- Bank of Baroda
- State Bank of India
- South Indian Bank
- IDBI Bank
- Central Bank of India
- Corporation Bank
- Karur Vysa Bank
- Tamilnad Mercantile Bank
- The Catholic Syrian Bank
- HDFC Bank
- UCO Bank
- IndusInd Bank
- City Union Bank
- Syndicate Bank
- Allahabad Bank
- The Jammu and Kashmir Bank Ltd.
- Punjab National Bank
- Allahabad UP Gramin Bank
- DCB Bank Limited
- Manipur State Co-op Bank
- Vijaya Bank
- Bombay Mercantile Co-Operative Bank Ltd
- Yes Bank
- Oriental Bank of Commerce
- Dena Bank
- Bank of Maharashtra
- Canara Bank
- Andhra Bank
- Axis Bank
The PFMS is constituted under the Controller General of Accounts in the Ministry of Finance. Its operations include:
- Laying out a financial management platform for all plan schemes.
- Integrating with core banking solutions of banks handling plan funds.
- Integrating with state treasuries.
- Monitoring the flow of funds of governmental schemes.
- Rendering information across all plan schemes or implementation agencies in the country on the subject of fund utilization.
- Enhancing public accountability through a review and decision support system.
Consequences of Non-Compliance
The registration licenses of 156 NGO’s were revoked owing to their non-compliance with this mandate. Such a revocation was also the consequence of not responding to a notice dated 20/06/2018. The notice demanded an explanation for not opening a bank account under section 17 of the FCRA, 2010 in PFMS-integrated banks.
NGOs, whose licenses have been revoked, are now required to wait for a period of one hundred and eighty days from the date of the order i.e. 6/12/2018 to apply for a fresh registration under the Foreign Contribution Regulation Act, 2010. These entities are barred from accepting foreign funds until the expiry of the suspension period.