MHA eases up the timeline for NGOs to comply with FCRA Amendment 2020 provisions | truCSR

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Important notice pertaining to the recent FCRA Amendment 2020 

Source: Photo by Eric Prouzet on Unsplash 

In a bid to ensure greater transparency and accountability pertains to foreign funding and its usage, the government of India added certain provisions to the FCRA Act 2010. Introduced in the monsoon session, the bill after making a successful passage through both Houses of Parliament, received the President of India's assent on 28th September 2020. The key amendments in the act - 

  • Added "public servant" to the list of persons prohibited from receiving foreign grants. 

  • Upload Aadhar details of all office bearers/Directors and other key functionaries of the association mandatory

  • Lowered the cap on administrative expenses from 50% to 20%

  • Prohibited the transfer of grants received under FCRA to any other organization or individual

  • Expanded the Ministry of Home Affairs' power by increasing the suspension period's maximum limit from 180 days to 360 days

  • Made procedural changes in the renewal of FCRA registration besides allowing the nonprofits to surrender their FCRA certificate voluntarily

  • Promulgated that foreign grants can only be received in an account designated as "FCRA Account" opened in a branch of the State Bank of India (SBI) at New Delhi Branch, 11, Sansad Marg, New Delhi - 110001

  • Obtain Darpan ID from Darpan Portal of NITI Aayog of NGO/Association


The proposed amendments stirred debates in all directions. Apprehensions, support, and downright condemnation immediately started pouring in. So much so that the Home Ministry had to issue a five-page order on account norms for NGOs under the Foreign Contribution Regulation Act 2020 on 20th November 2020. 


Under the recent amendments, as already stated, an organization or individual can only receive Foreign Grants in a designated account in the State Bank of India (SBI) at New Delhi. The order provided that "The "FCRA Account" holder shall have complete freedom to transfer the foreign contribution (FC) received in "FCRA Account" opened in NDMB to another "FCRA Account," if any, of his choice opened in any branch of any Scheduled Commercial Bank as per its convenience for keeping or utilization." In simpler terms, the order allows the FCRA registered nonprofits/ individuals to transfer foreign grants to another bank. It also clearly states that "NDMB will not levy any charges/fee etc., on any transfer of foreign contribution from the "FCRA Account" to "another FCRA Account."  Besides these, the order also contains information pertains to grievance redressal and Standard Operating Procedures for account opening. 


Presently, there are approximately 23,000 entities having a Certificate of Registration or prior permission to receive foreign contribution. They now have to open an "FCRA Account" for inward remittance of any foreign contribution at the aforementioned specified branch on or before 31st March 2021.


The implications of this particular amendment would take form over a period of time. However, many organizations have shown apprehensions towards this centralization process through SBI by stating that asking 23,000 entities to open an FCRA account would be highly disruptive and cumbersome and operating these accounts properly would be a task as the home branch is in Delhi. Nonetheless, as of now, the recent order allowing nonprofit organizations to retain their existing FCRA account for keeping and utilization of funds is a wind-down. 


In order to be able to comply with the long list of conditions, the Central Government has extended the timeline for uploading/online submission of annual returns for the year 2019-20 up to June 30, 2021.


Read more here - Advisory for Compliance by FCRA NGOs/Associations with the Amended Provisions in FCRA, 2010 and FCRR, 2011, click here for more details.


- Team truCSR

truCSR is a social engagement platform run by a group of professionals with a passion for social development with a cumulative experience of more than 100 years in the field of Corporate Social Responsibility (#CSR), finance, taxation, corporate and allied laws, corporate governance and strategic management. The platform seamlessly connects Implementers and Contributors to amplify the #CSRimpact and accelerate the process of social change with digital solutions. This platform is owned and developed by a company headquartered in Mumbai, Maharashtra. 

If you are looking for projects from #nonprofit organizations in different thematic areas, write to info@trucsr.in - truCSR will coordinate end-to-end with the nonprofit community and share proposals with you as per the requirement.

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