Section X

Banks & Issues Related To Banking

Section X

What is the role of the banks in implementation of FCRA, 2010?

Answer: The Foreign Contribution (Regulation) Act, 2010 (FCRA, 2010) assigns a very crucial role to banks. The FCRA Charter for Banks (Annexure-V) clearly explains the role of banks and the competent authorities in the banks are expected to scrupulously follow various provisions of the FCRA, 2010 and Foreign Contribution (Regulation) Rules, 2011 (FCRR, 2011).  The bankers are expected to go through all the provisions of the amended FCRA 2010 as well as amended FCRR, 2011, as available on the FCRA website [https://fcraonline.nic.in]. Non-compliance of the directives given in the Act and the Rules by the defaulting bank will constitute a violation and may invite penal provisions of the FCRA, 2010 besides appropriate action by the Reserve Bank of India. Bankers are also requested to familiarise themselves with the circulars/guidelines issued by the Reserve Bank of India and the State Bank of India in this regard.

No bank should credit any foreign contribution to the account of an Association unless it produces documentary evidence of having obtained registration/prior permission from the MHA for the same.  In case any foreign contribution is credited to the account of an NGO/ Association/Trust directly which does not have FCRA registration/PP, the bank should not allow utilization of such fund and inform the NGO/Association/Trust concerned to obtain necessary prior permission/registration from the Central Government for the same. Simultaneously, the bank should inform MHA (FCRA Wing) about such receipt.

What are the specific provisions of FCRA, 2010 and FCRR, 2011 that the Banks should be concerned with?

Answer: The Banks should specifically look into the following provisions of FCRA, 2010 and FCRR, 2011 for effective implementation of the Act ‒ 

“Section 17 of FCRA, 2010: Foreign contribution through scheduled bank

 

(1) Every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as “FCRA Account” by the bank, which shall be opened by him for the purpose of remittances of foreign contribution in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify in this behalf:

 

Provided that such person may also open another “FCRA Account” in any of the scheduled bank of his choice for the purpose of keeping or utilising the foreign contribution which has been received from his “FCRA Account” in the specified branch of State Bank of India at New Delhi:

 

Provided further that such person may also open one or more accounts in one or more scheduled banks of his choice to which he may transfer for utilising any foreign contribution received by him in his “FCRA account” in the specified branch of the State Bank of India at New Delhi or kept by him in another “FCRA Account” in a scheduled bank of his choice:

 

Provided also that no funds other than foreign contribution shall be received or deposited in any such account.

 

(2) The specified branch of the State Bank of India at New Delhi or the branch of the scheduled bank where the person referred to in sub-section (1) has opened his foreign contribution account or the authorised person in foreign exchange, shall report to such authority as may be specified, —

 

(a) the prescribed amount of foreign remittance;


 

(b) the source and manner in which the foreign remittance was received; and

 

(c) other particulars,

 

in such form and manner as may be prescribed.“

“Section 18 of FCRA, 2010: Intimation

 

(1) Every person who has been granted a certificate or given prior approval under this Act shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government, and such other authority as may be specified by the Central Government, as to the amount of each foreign contribution received by it, the source from which and the manner in which such foreign contribution was received, and the purposes for which, and manner in which such foreign contribution was utilised by him.

 

(2) Every person receiving foreign contribution shall submit a copy of a statement indicating therein the particulars of foreign contribution received duly certified by officer of the bank or authorised person in foreign exchange and furnish the same to the Central Government along with the intimation under sub section (1).“

“Rule 16 of FCRR, 2011: Reporting by banks of receipt of foreign contribution.

 

The bank shall report to the Central Government within forty-eight hours any transaction in respect of receipt or utilisation of any foreign contribution by any person whether or not such person is registered or granted prior permission under the Act.”

Which is the specified branch of the State Bank of India at New Delhi where the designated FCRA Account is to be opened for receiving foreign contribution?

Answer: The designated FCRA Account is to be opened only in the State Bank of India, New Delhi Main Branch, 11, Sansad Marg, New Delhi-110001 (SBI, NDMB) for receiving foreign contribution vide Section 17(1) of FCRA, 2010 read with MHA’s Gazette Notification [S.O. 3479(E) dated 7th October, 2020.

What are the directives of MHA to open and operate the FCRA Account in SBI, NDMB?

Answer: The following directives were issued by MHA in terms of Section 17(1) of FCRA, 2010 read with Public Notices dated 13/10/2020 & 18/05/2021, Standard Operating Procedure (SOP) dated 20/11/2020 and further clarifications given in FCRA Charter for Banks (Annexure-V) dated 29/01/2021:

(i)        All FCRA registration/PP holders shall receive FC only in their designated “FCRA account” in the State Bank of India, New Delhi Main branch (SBI, NDMB). They shall receive FC in their FCRA Account in SBI, NDMB through SWIFT Mode. Since SWIFT mode is used for international money transfers, it implies that FC from overseas foreign donors can be received only in the FCRA Account in SBI, NDMB.

(ii)       As per FCRA Charter for Banks, some other FC from any foreign source/foreigner/ including OCI/PIO card holders, whether in cash (INR or foreign currency)/local cheque/demand draft/bank transfer including overseas bank transfers in any currency including INR, even if that foreigner/foreign source is located in India, should also be received/deposited in the FCRA Account in SBI, NDMB.

(iii)      FCRA registration/PP holders have complete liberty to have ‘another FCRA Account’ for Keeping or Utilising the FC which has been received in the account in SBI, NDMB. They can link this Account with the designated “FCRA Account” in SBI, NDMB. They may also have Utilisation Account(s), if any, in other bank(s).  They shall have complete freedom to transfer the FC received in their designated “FCRA Account” in SBI, NDMB to ‘another FCRA Account’, if any, opened in any branch of any scheduled commercial bank for keeping or utilization. They can also transfer the FC to their Utilisation Account(s), if any, for utilising the FC from their designated “FCRA account” in SBI, NDMB or from the ‘another FCRA Account’, if any, wherein they have already transferred the FC received in the designated “FCRA account” in SBI, NDMB for keeping or utilising.  

(iv)      No funds other than FC shall be received or deposited in any such FCRA Account(s) or Utilisation Account(s).

(v)       To open the afore-mentioned designated “FCRA Account” in SBI, NDMB, the applicants need not visit SBI, NDMB. Entities seeking to open the designated “FCRA Account” in SBI, NDMB may approach either the nearest SBI Branch or any other SBI Branch of their choice for submitting the completed Account Opening Form (AOF) for KYC/photo/signature verification.

(vi)      Mandatory KYC documents should include KYCs of signatories and KYCs of Controlling Person/Beneficial Owner according to RBI guidelines. The format for Board Resolution and Multi-Level Marketing (MLM) declaration, as prescribed by SBI, should also be submitted along with the prescribed forms for opening of the designated FCRA Account. [Customer Information File (CIF) for the KYC documents is required by SBI in respect of all the members/office bearers of the EC/GB who can have control over the bank account in any manner.]

(vii)     The AOF accepting SBI Branch would issue an acknowledgement to the applicant, scrutinize the AOF and KYC documents and email scanned copies of the verified documents to SBI, NDMB within 3 working days from the date of receipt of completed documents.

(viii)    SBI, NDMB shall confirm to the applicant entity through an email regarding receipt of AOF and other documents within 1 working day of its receipt.

(ix)      SBI, NDMB will intimate to the applicant entity, by registered email ID as well as through SMS, the details of “FCRA Account” so opened within 3 working days from the date of receipt of duly verified scanned copies of complete set of AOF and KYC documents from the e-mail ID of the AOF receiving branch.

(x)       SBI, NDMB will allow receipt of FC only in the “FCRA Account” through SWIFT mode after confirming that the Association concerned has already been granted Registration or PP by MHA under FCRA, 2010.

(xi)      The foreign inward remittance received should invariably contain following details:

“FCRA Account” Number of the Beneficiary in SBI, NDMB

SWIFT Code of NDMB (SBININBB104)

Name of the Beneficiary

Name of the Donor/ Remitter

Account number of the Donor/Remitter

Donor/Remitter’s Address

Donor/Remitter’s Country of Residence 

(xii)     SBI, NDMB shall intimate the Association concerned, through e-mail and SMS regarding receipt of FC.

(xiii)    The Association concerned will be required to submit an undertaking detailing the purpose of the receipt of funds as per FEMA declaration and RBI guidelines to the SBI Branch, where it had initially submitted the AOF. [This declaration is to be given after receipt of intimation from SBI, NDMB regarding inflow of FC.]

(xiv)    Standard Forex conversion rate as permitted under the FEMA guidelines and RBI instructions would be applied on the inflow of foreign currency. It shall be duly intimated to the account holder through an e­mail.

(xv)      SBI, NDMB will not levy any charges/fee etc. on any transfer of FC from the “FCRA Account” to “another FCRA Account”, if any, and to other Utilization Account(s), if any, of the Association. For each such transfer, the “FCRA Account” holder would be informed through e-mail and SMS.

(xvi)    Entities may also avail Internet Banking facility (with full transaction rights) with SBI, NDMB.

(xvii)   The SOP also provides for grievance redressal mechanism while opening of the “FCRA Account” or operating it. Any such grievance is to be lodged with SBI, NDMB through e-mail [fcracomplaints.00691@sbi.co.in] / phone [011-23374392, 23374143, 23374213].

Does Section 17(1) of FCRA, 2010 read with MHA’s FCRA Charter for Banks dated 29/01/2021 (Annexure-V) mean that Associations having registration/PP can have multiple bank accounts for receipt and utilisation of FC?

Answer: Yes. There would be following 3 types of bank accounts for receipt and utilisation of FC by Associations having registration/PP under FCRA, 2010:

(1)        An exclusive single “FCRA Account” (also termed as the “designated FCRA Account” or “FCRA receipt Account”) in the State Bank of India, New Delhi Main branch (SBI, NDMB) for receiving FC through SWIFT mode, i.e., from overseas foreign sources.  Some other FC receipts from foreign sources in India, as mentioned in the FCRA Charter for Banks (Annexure-VII) are also to be received/deposited in the FCRA Account in SBI, NDMB. Please refer to the answer to Q. 194 also.

(2)       ‘Another FCRA Account‘ in any scheduled commercial bank where the Associations may transfer the FC from the “designated FCRA Account” at SBI, NDMB for keeping or utilization and may also deposit some other FC generated in India, as mentioned in the FCRA Charter for Banks (Annexure-V).

(3)       One or more accounts called Utilisation Account(s) in any scheduled commercial bank(s) for utilising the FC after transferring the FC received in their “designated FCRA account” in SBI, NDMB or from the ‘another FCRA Account’, wherein they have already transferred the FC from their “designated FCRA account” in SBI, NDMB for keeping or utilising.  Opening of the Utilisation Accounts would be as per requirement of an Association.

In this context, the following points mentioned in the FCRA Charter for Banks (Annexure-V) may please be carefully noted:

(a)       The “FCRA account” of the Association in the SBI, NDMB would be the first exclusive port of receipt of its FC in India.  Each existing FCRA registration/PP holder as well as new applicant for registration/PP would have to comply with the same.

(b)       The scheme of the amended FCRA, 2010 is clear. Foreign Contribution shall be received for the first time in India only in the ‘FCRA Account’ opened in the SBI, NDMB. However, the NGO/association can open ‘another FCRA Account’ in any PFMS branch of a scheduled bank of its choice anywhere in the country and also, if it so decides, open as many FCRA ‘utilization accounts’ in bank branches of its choice as it decides. The authorities of SBI, NDMB shall transfer any foreign contribution received by any NGO/association to their other FCRA account or utilization account or both of them as per the choice/decision of that NGO/association.

(c)        Foreign contribution has to be received only through banking channels and it has to be accounted for in the manner prescribed.

(d)       For any contribution to constitute FC, it must emanate from a “foreign source” even if that foreign source is located within India and even if that donation is in Indian rupees or cash etc. vide answer to Q. 194 for more clarification.

(e)       Any kind of interest or income that is derived from the foreign contribution or interest again becomes part of foreign contribution. Therefore, it will be credited back into the foreign contribution account to be utilized strictly as per the provisions of FCRA, 2010.

Note:

(i)        No funds other than FC shall be received or deposited in any of the above bank accounts vide proviso to Section 17(1) of FCRA, 2010.

(ii)       There is no bar in opening of Utilisation Account(s) with banks other than the one where the aforesaid 2 types of FCRA Accounts are maintained. However, it is advisable to open such accounts in the branches of the same bank, if available at the location where the Utilisation Account(s) are to be opened.

Are there any specified banks for the purpose of opening “another FCRA Account” or “Utilisation Account”(s)?

Answer: All such bank accounts for “another FCRA Account” and “Utilisation Account”(s) should be opened in any scheduled commercial bank, i.e., any of those banks included in the Second Schedule of Reserve Bank of India Act, 1934, authorised to deal with foreign exchange.  Further, the bank(s) should be integrated with the Public Financial Management System (PFMS).   ​

Whether Banks should allow an Association to open all such accounts for receiving, keeping and utilising foreign contribution with INR?

Answer: SBI, NDMB should allow any ‘person’ desirous of seeking registration or prior permission under FCRA, 2010 to open the designated “FCRA Account” with INR. This designated FCRA Account number will be mentioned in the letter granting registration/PP by MHA.   However, SBI, NDMB shall not allow any inward foreign remittance in that account and await MHA’s decision on the application for grant of registration/PP.  As soon as MHA’s approval for such registration/PP is conveyed to SBI, NDMB through e-mail, it shall allow inflow of FC into the relevant account from that date. All the FCRA registration/PP holders shall receive FC remittances only in this exclusive designated “FCRA Account”.

All scheduled commercial banks should also allow any such ‘person’ to open “another FCRA Account” with INR as the person may like to indicate the same in the application for registration/PP.  However, the bank concerned should not allow deposit of any FC in that account till such time it receives documentary evidence that the ‘person’ has been given registration/PP by MHA. This “another FCRA Account” number will also be mentioned in the letter granting registration/PP by MHA.

As for “Utilisation Account(s)”, all scheduled commercial banks should also allow any ‘person’ to open such account(s) subject to the condition that the ‘person’ produces documentary evidence regarding its registration/PP by MHA under FCRA, 2010 and that the FC funds to be deposited in such Utilisation Account(s) are transferred by the ‘person’ either from the ‘designated FCRA Account’ in SBI, NDMB or from the ‘another FCRA Account’ of that ‘person’.  The banks may also like to verify the authenticity of the documents from MHA’s website regarding the person’s registration/PP under FCRA, 2010.  (The procedure for opening of Utilisation Account(s) has been explained in reply to Q.223.)

Note: Please note that charitable/non-profit Associations can have all the above accounts as Savings Bank Accounts.

Is there any requirement under FCRA, 2010 for maintaining a minimum balance in the FCRA Account by an Association?

Answer: No. There is no such requirement under FCRA, 2010 or FCRR, 2011.​

In which bank account – the “Another FCRA Account” or the “Utilisation Account(s)” – an Association should deposit its FC receipts that are not coming through foreign remittances?

Answer: MHA’s SOP dated 20/11/2020 and its FCRA Charter for Banks (Annexure-V) dated 29/01/2021 prescribe that entities having registration/PP should receive FC from overseas through SWIFT mode in the designated “FCRA Account” in SBI, NDMB and may have “Another FCRA Account” for receiving some other FC receipts from foreign sources in India.  Therefore, the answer to this query is determined by the following illustrative (but not exhaustive) list given by MHA at paragraph 11 of the FCRA Charter for Banks:

(i)        Donations given in Indian rupees (INR) by any foreigner/foreign source including foreigners of Indian origin like OCI or PIO cardholders (to be deposited in SBI, New Delhi Main Branch).

(ii)       Donations received in Indian rupees (INR) from any ‘foreign source’ even if that source   is located in India at the time of such donation (to be deposited in SBI, New Delhi Main Branch).

(iii)      FC received in cash/local cheque/demand draft or through overseas bank transfers in any currency including Indian rupees from any “foreign source” (to be deposited in SBI, New Delhi Main Branch).

(iv)      All interest that accrues on the FC received in any bank account including interest on FDs (to be deposited in any Bank Branch).

(v)       Any income [e.g., interest, rent, enterprise or FD etc. vide Annexure-IV)] generated in India from assets created by spending the funds from FC.  This includes proceeds from sales of such assets which have been credited even partly by spending the FC (to be deposited in any Bank Branch).

(vi)      Proceeds from sale of FC received in kind or in the form of securities (to be deposited in any Bank Branch).

(vii)     Re-depositing the unutilised FC which might have been drawn out as advance for any purpose by the NGO/association. Such a re-deposit, however, must be backed by matching withdrawal entries and relevant records to establish that it was unutilised/unspent FC amount. This would include any refund received on account of cancellation of any services/tickets etc. sought to be taken by utilising FC (to be deposited in any Bank Branch).

Author’s Note:

(a)  The expression “in any Bank Branch” at (iv) to (vii) in the above illustrative but not exhaustive list should mean either “Another FCRA Account” or any “Utilisation Account(s)”. This also implies that an Association may have “Another FCRA Account” for its operational requirements for depositing the types of FC mentioned in (iv) to vii) above.  In other words, now there can be 2 FCRA Accounts – the designated “FCRA Account” at SBI, NDMB for receipt of FC remittances from overseas and “Another FCRA Account” in any other bank for deposit of some other FC receipts generated in India, as mentioned above.  There can also be a 3^rd type of FCRA Account, namely Utilisation Account for utilising any FC received in the main “FCRA Account” in SBI, NDMB or kept in “Another FCRA Account” in any other scheduled bank.

(b)   In view of (i) to (iii) of the above list, it would perhaps be prudent for an Association to have the “Another FCRA Account” in a branch of SBI, preferably near the place where it is located, so that it can easily deposit such foreign donations (FC) to its FCRA Account in SBI, NDMB through that branch of SBI.

(c)  The Association concerned may decide whether or not to have any Utilisation Account depending on its requirement.

(d)   The intention behind prescribing the receipt of FC in the mandatory FCRA Account in SBI, NDMB and Another FCRA Account in any other bank is to track the inflow of FC and its utilisation through these two accounts and Utilisation Account(s), if any, to prevent money laundering and misappropriation by any Association.

(e)       An Indian national living abroad, i.e., an Indian passport holder, is not a ‘foreign source’, and he/she should not send his/her donations to any Association in India to its FCRA receipt Account in SBI, NDMB or any other FCRA related Account of an Association because his/her donations are not treated as FC.

Does an Association need to have separate bank accounts ‒ for its local funds and FC funds? Whether inter-account transfer of funds between the bank accounts for FC and the domestic bank accounts of an Association is permissible?

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Answer: Associations must have separate bank accounts for the local/domestic funds and FC funds. All local donations, income etc. should be deposited in the local/domestic bank accounts and used therefrom.  All FC funds are to be received, kept and utilised from the FCRA Accounts and Utilisation accounts as mentioned in reply to the previous questions. There should not be any inter-account transfer of funds between the local/domestic bank account(s) and the bank account(s) for FC funds. Local funds/donations should never be mixed up with FC. The new Form FC-4 for submission of Annual Return requires the Association concerned to indicate whether during the period under report it had credited any domestic contribution in any ‘FCRA Account’ and, if the answer is ‘yes’, brief details must be provided. Receiving and depositing any fund other than FC in the bank accounts for receiving and utilising FC is a violation of Section 17 of FCRA, 2010 and MHA may impose a penalty for such violation. Please see the reply to Q. 228 for the quantum of penalty for compounding such offence.

Whether banks should credit any FC received by an Association to its account even if the Association does not have registration/PP from MHA and subsequent reporting can be made by banks to MHA? 

Answer: Rule 16 of FCRR, 2011 states that, “The bank shall report to the Central Government within forty-eight hours any transaction in respect of receipt or utilization of any foreign contribution by any person whether or not such person is registered or granted prior permission under the Act.”   It follows from the above Rule that some branch of bank may mistakenly credit foreign contribution received by an Association without registration or prior permission because of lack of knowledge of FCRA and FCRR.  However, while the banks can prevent such a situation in cases where a cheque is presented by the recipient for deposit in its savings/current account, it may not always be possible when the remittance is through wire transfer.  If it comes to the knowledge of the bank that FC has been credited to the account of an Association which does not have FCRA registration/PP, the bank should not allow utilization of such fund and inform the Association concerned to obtain necessary prior permission/registration from MHA for the same. Simultaneously, the Bank should inform MHA (FCRA Wing) about such receipt as per Rule. Non-compliance of the above by the bank is a violation of Section 17 (2) of FCRA, 2010 and Rule 16 of FCRR, 2011 and may render the defaulting bank liable for appropriate action by the RBI. On its part, the Association concerned should also immediately request (in writing) the bank not to credit the amount and to return the same to the remitter.

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How to treat undisclosed/anonymous donations received in domestic or FCRA Account(s) through wire transfer from abroad?

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Answer: Associations sometimes receive contribution directly in their domestic bank account(s) or FC account(s) through wire transfer from various overseas sources where the donors’ identity may not be readily available to the Associations.  In such cases, the bank concerned should try to ascertain whether the contribution is from an Indian source or foreign source so that the money is credited in the correct bank account of the Association concerned. The Associations, on their part, should also try to find out the donor’s identity and origin and request the Banks concerned to ascertain the source of donation. As has been explained in reply to the Q. nos. 189 & 190, an Association can receive FC from abroad only in its designated FCRA Account at SBI, NDMB.  The new Form FC-4 for submission of Annual Return requires the Association concerned to indicate whether during the period under report it had received any foreign contribution in an account other than the designated ‘FCRA receipt Account’ and, if the answer is ‘yes’, brief details must be provided. Such a receipt is a violation of Section 17 of FCRA, 2010 and there is a penalty for compounding such violation vide reply to Q. 228.

Should the banks report transactions pertaining to FC which are returned back to the remitter by the beneficiary Association for want of registration/prior permission from MHA?

Answer:It is not necessary for the bank to report such foreign contribution that is returned to the donor without crediting in the account of the recipient. Whenever it comes to the knowledge of an Association that does not have registration/ PP under FCRA that any foreign donation has been sent to its bank account, it should immediately request (in writing) the bank not to credit the amount and to return the same to the remitter.

Whether reporting by banks is also applicable for transfer of funds between FCRA accounts of two or more Associations?

Answer: Yes. Reporting by banks is also applicable to transfer of funds from one FCRA registered Association to another.  Transfer of FC to any other ‘person’, whether registered or not, has been prohibited with effect from 29/09/2020, i.e., the date on which the Foreign Contribution (Regulation) Amendment Act, 2020 came into force.

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An Indian citizen living in a foreign country, i.e., a NRI holding valid Indian passport, sends donation in foreign currency through normal banking channels from his foreign bank account.  Whether such donation in foreign currency should be deposited into the FCRA Account or the domestic bank account?

Answer: Since the contribution is from an Indian citizen, the amount will be treated as local donation and should be deposited in the local/domestic bank account even if the amount is coming in foreign currency through a foreign Bank, whether situated abroad or in India. Banks should not allow such remittance to be credited into the FCRA Account(s) of the Association. The new Form FC-4 for submission of Annual Return requires the Association concerned to indicate whether during the period under report it had credited any domestic contribution in any ‘FCRA Account’ and, if the answer is ‘yes’, brief details must be provided. Receiving and depositing any fund other than FC in the bank accounts for receiving and utilising FC is a violation of Section 17 of FCRA, 2010 and there is a penalty for compounding such violation vide reply to Q. 228.​

Whether donation received from a foreign citizen/source is to be received/deposited in FCRA Account(s) or only the amount coming through a bank situated outside India is to go into such Account(s)?

Answer:The person or entity and neither the bank, whether a foreign bank situated abroad or in India or an Indian bank, nor the currency or the location/country from where it comes, determines whether the contribution is FC or otherwise. In other words, the source that is making the contribution is the factor that determines whether a contribution is FC or not. Therefore, if the contribution is made by a foreign citizen/entity through wire transfer from abroad, the amount shall have to be received in the Association’s designated FCRA Account at SBI, NDMB.  If the FC is received from a foreign source located in India, then also the amount should be deposited in the ‘FCRA Account’ of the Association at SBI, NDMB, as explained in reply to Q. Nos. 190 & 194.

There are complaints from various Associations that some banks refuse to allow credit of legitimate foreign contributions in the FCRA Accounts of Associations having registration/PP. What should an Association do in such cases?

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Answer: In this context, the reply to Q. Nos. 190 & 194 may please be referred to.  Associations facing such problem with any branch of a bank in connection with its transactions in FC should take up the matter with the higher authorities of the bank concerned. Associations should also bring the matter to the notice of MHA for redressal. Associations may also request the banks concerned to refer to MHA’s FCRA Charter for Banks (Annexure-V).  ​

Sometimes, foreigners visiting India donate cash in foreign currency to FCRA registered trusts etc.  It has been noticed that the branches of certain banks refuse to deposit the cash donations in the FCRA Account of the trusts.  What should be done in such cases?

Answer: The FCRA registered Associations can receive cash from foreign donors and deposit the same in the ‘FCRA Account’ of the Association at SBI, NDMB, as explained in reply to Q. Nos. 190 & 194.  The banks should not have any objection to such transactions.  Please see the reply to the previous question in this regard.​

Does it require any approval of MHA for withdrawal of money from the FCRA Account and re-depositing the unutilised portion thereof back to that Account?

Answer: No. Regular and normal banking activity is not regulated under FCRA, 2010.  The basic point to remember is that no fund other than FC should be deposited in any FCRA Account and that local fund and FC should not be mixed up under any circumstances.

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Whether an Association can re-deposit unutilised amount of FC drawn as advance from the ‘another FCRA Account’ for some purpose in the normal course of running the organisation, such as, foreign/ local tour/ project advance/ advance to an employee etc. as also any amount of refund on account of cancellation of tickets (air/rail) back to that same account? 

Answer: Yes.Such a re-deposit, however, must be backed by matching withdrawal entries and relevant records to establish that it was unutilised/unspent FC amount. This would include any refund received on account of cancellation of any services/tickets etc. sought to be taken by utilising FC (in any Bank Branch). Please see the reply to Q. Nos. 194 and FCRA Charter for Banks (Annexure-V).​

Whether an Association can re-deposit unutilised amount of FC drawn as advance from the Utilisation Account for some purpose in the normal course of running a project, such as, local tour, advance to an employee for executing some work related to the project etc. back to the Utilisation Account?

Answer: Yes.  Such a re-deposit, however, must be backed by matching withdrawal entries and relevant records to establish that it was unutilised/unspent FC amount. This would include any refund received on account of cancellation of any services/tickets etc. sought to be taken by utilising FC (in any Bank Branch). Please see the reply to Q. Nos. 194 and FCRA Charter for Banks (Annexure-V).​

Whether inter-account transfer of FC funds is allowed within the multiple Utilisation Accounts of an Association?

Answer: Inter-account transfer of FC funds between the Utilisation Accounts of an Association is not permissible.  An Association is permitted to transfer FC to the Utilisation Account(s) from the “designated FCRA account” in SBI, NDMB or from the “another FCRA Account”, wherein they have already transferred the FC from their “designated FCRA account” in SBI, NDMB for keeping or utilising.   Utilisation Account is opened for convenience in utilising the FC at different locations or for different projects and, no funds other than FC shall be received or deposited in such Utilisation Account(s).​

Whether an Association can open separate FCRA A/cs for separate donors?

Answer: An Association must receive FC from all overseas donors in the exclusive designated FCRA Account at SBI, NDMB and may transfer the FC so received to its ‘Another FCRA Account’ for keeping/utilisation or to the Utilisation Account(s).  If it becomes necessary to have a separate account for any donor, a separate Utilisation Account may be opened and the FC from that donor received in the designated FCRA Account at SBI, NDNB or kept in the ‘Another FCRA Account’ of the Association may be transferred to that Utilisation Account meant for utilising that particular donor’s donation.

Whether the donor’s representative can be a signatory to the cheque book for operating the Utilisation Account opened by an Association for utilisation of the FC from that donor?

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Answer: Neither FCRA, 2010 nor FCRR, 2011 specify anything in this regard.  However, since the representative of the donor can neither be a member of the governing body nor a part of the Association in any capacity, such a mechanism to have a representative of the donor as a signatory to any bank account of the Association would not be legally justifiable. As for monitoring proper utilisation of its donation, the donor can always check the utilisation from the bank statements. ​