Foreign Contribution (Regulation) Act

Foreign Contribution (Regulation) Act

#GS-02 Governance

For Prelims

Foreign Contribution (Regulation) Act 2010

  • The act has made it mandatory for all NGOs which receive foreign funds to receive it in a designated bank account at the State Bank of India’s New Delhi branch.
  • All NGOs which are seeking foreign donations need to open a designated FCRA  account at the New Delhi branch of SBI.
  • This account should be used for receiving or depositing the foreign contribution only and no other funds.
  • The NGOs are allowed retain their existing FCRA account in any other bank which will need to be mandatorily linked to the SBI branch in New Delhi.
  • Foreign contribution has to be transferred only through banking channels and needs to be accounted for in the manner prescribed in the Act.
  • Under the Act, organisations need to renew their registration once in every five years.
  • NGOs need to apply for renewal within six months of the date of expiry of registration.
  • The failure to apply for renewal will result in the registration deemed to have been expired.
  • It prohibits public servants from receiving foreign contributions.
  • Aadhaar number as an identification document has been made mandatory for all office bearersdirectors or key functionaries for receiving foreign contribution.

FCRA Amendment Act 2020:

  • It increased the limits for Indians who receive money from their relatives abroad up to Rs 10 lakh (from 1 lakh earlier) annually under FCRA.
  • The time limit for the individuals inform the government if the amount exceeds the limit was increased to 90 days to instead of 30 days earlier,.
  • It gave individuals and organisations or NGOs 45 days (from the earlier 30 days) for the application for ‘registration’ or ‘prior permission’ under the FCRA to receive funds.
  • Five more offences under the FCRA have been made “compoundable” (to make a total of 12) instead of directly prosecuting the organisations or individuals.
  • While NGOs earlier could use up to 50% funds for administrative use, the new amendment restricted this use to 20%.