Foreign Contribution (Regulation) Act (FCRA)
Foreign Contribution (Regulation) Act (FCRA) 1976:
- The FCRA was enacted during the Emergency in 1976 amid rising concerns about foreign powers interfering in India’s affairs by pumping money into the country through independent organisations.
- The law sought to regulate foreign donations to individuals and associations so that they functioned in a manner consistent with the values of a sovereign democratic republic.
- The act was amended in 1984 which made it mandatory for all the Non Governmental Organisations to register themselves with the Home Ministry.
- The act was replaced with a stricter act in 2010.
Foreign Contribution (Regulation) Act (FCRA) 2010:
- The new act makes it mandatory for all NGOs to receive foreign funds in a designated bank account at the State Bank of India’s New Delhi branch was inserted.
- All NGOs seeking foreign donations have to open a designated FCRA account at the SBI branch.
- No funds other than the foreign contribution should be received or deposited in this account.
- The NGOs can retain their existing FCRA account in any other bank but it will have to be mandatorily linked to the SBI branch in New Delhi.
- Foreign contribution has to be received only through banking channels and it has to be accounted for in the manner prescribed.
- Under the Act, organisations are required to register themselves every five years.
- It bars public servants from receiving foreign contributions.
- Aadhaar number is mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document.
- While NGOs earlier could use up to 50% funds for administrative use, the new amendment restricted this use to 20%.
- United Nations and 117 international organisation’s contribution to Indian entities will not be covered under the stringent Foreign Contribution (Regulation) Act (FCRA), 2010, as per Union Home Ministry.