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Centre relaxes deadline for opening account in SBI for foreign funds by NGOs
The ministry also issued another order on Tuesday saying that the validity of FCRA licences that expired or have been expiring since September 2020 will now remain valid till September end this year
The Union home ministry has extended the deadline for opening designated bank accounts for foreign donations meant for non-governmental organisations (NGOs) at the State Bank of India (SBI)’s 11 Sansad Marg branch in New Delhi to June 30. The previous deadline expired on March 31 and many NGOs argued this was hampering their work related to Covid-19 relief.
Several NGOs approached Delhi and Gauhati high courts seeking exemption from opening bank accounts in New Delhi.
The amended Foreign Contribution Registration Act (FCRA), enacted in September 2020, made it mandatory for all office bearers of NGOs to register their Aadhar details and open designated accounts in Delhi if they wished to receive foreign funds.
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“Existing FCRA holders have now to open the FCRA account in SBI New Delhi up to June 30,” said a ministry order on Tuesday. It said that post July 1, the NGOs not having an account in SBI will not be able to receive any foreign funding.
The ministry also issued another order on Tuesday saying that the validity of FCRA licences that expired or have been expiring since September 2020 will now remain valid till September end this year.
The government made the FCRA stringent last year by including clauses that prohibit public servants from receiving any funds from abroad. It also made Aadhar registration mandatory for NGOs, prohibited transfer of foreign funds to another person and designated the SBI branch in New Delhi as the only one where such funds can be received.
The amended law also does not allow NGOs to use more than 20% of foreign funds for administrative purposes, a limit which was 50% earlier.
Advocate Abishek Jebaraj, who is representing an Andhra Pradesh NGO in Delhi high court, said: “We are happy that it gives us immediate relief, but 40 days exemption is not enough, especially for NGOs working in states like Andhra Pradesh and Tamil Nadu and have to submit documents in New Delhi. ...opening a bank account and actually operationalising it takes time...”
Jebaraj said around 12 NGOs have challenged the FCRA rule in the high court.
