Foreign Contribution (Regulation) Act

#GS-02 Governance

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 bearers, directors or key functionaries for receiving foreign contribution.

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%.