Foreign Contribution (Regulation) Act

Foreign Contribution (Regulation) Act

Foreign Contribution (Regulation) Act (FCRA) 2010

#GS-02 Governance

For Prelims

Provisions of the Act:

  • The 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.
  • NGOs are expected to apply for renewal within six months of the date of expiry of registration.
  • In case of failure to apply for renewal, the registration is deemed to have expired.
  • It barspublic servants from receiving foreign contributions.
  • Aadhaar number is mandatory for all office bearersdirectors or key functionaries of a person receiving foreign contribution, as an identification document.

FCRA Amendment Act 2020:

  • It allows Indians to receive up to Rs 10 lakh (from 1 lakh earlier) annually from their relatives abroad under FCRA.
  • If the amount exceeds, the individuals will now have 90 days to inform the government instead of 30 days earlier.
  • It has given individuals and organisations or NGOs 45 days (from 30 days earlier) for the application of obtaining ‘registration’ or ‘prior permission’ under the FCRA to receive funds.
  • Made five more offences under the FCRA “compoundable”, to 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%.

Source “FCRA licence of 1,811 NGOs cancelled in 3 years: govt.