In the news
- The Union Home Office (MHA) said it had refused to renew the FCRA registration of Missionaries of Charity, a Catholic denomination founded by Nobel laureate Mother Teresa, because “some adverse input has been noticed.”
- Control foreign grants: It has many new measures to control foreign grants.
- The law enacted in 1976 was amended in 2010 and then in 2020.
- Application: FCRA applies to all associations, groups and NGOs who wish to receive foreign grants.
- It is compulsory for all such NGOs to register themselves under FCRA
- Validity: The registration is initially valid for five years and can be renewed later if they comply with all the rules.
- Purpose: Registered associations may receive foreign contributions for social, educational, religious, economic and cultural purposes.
- Compulsory IT filing: It is mandatory to file annual return on the basis of income tax.
- Internal security: FCRA regulates foreign grants and ensures that such contributions do not adversely affect internal security.
There are new guidelines for banks Foreign Contribution (Control) Act Rules
- State Bank of India New Delhi Branch: A new provision has been made mandatory for all NGOs to accept foreign funds in a designated bank account at the New Delhi branch of State Bank of India.
- Nominated FCRA account: All NGOs seeking foreign grants must open a designated FCRA account at the SBI branch.
- NGOs can hold their existing FCRA account in any other bank but it is mandatory to be affiliated with SBI branch in New Delhi.
- Only banking channels allowed: Foreign contributions should be accepted only through banking channels and it should be calculated in the prescribed manner.
- OCI or PIOGrants in Indian Rupees by any foreign source, including foreigners of Indian descent, such as OCI or PIO cardholders, should also be considered as foreign contributions.
- Sovereignty and integrity: For this, NGOs must make a commitment that the acceptance of foreign funds will not adversely affect India’s sovereignty and integrity or affect friendly relations with any foreign state and will not disrupt communal harmony.
Who can’t accept foreign grants?
- Prohibition: Members of the legislature and political parties, government officials, judges and the media are prohibited from accepting any foreign grants.
- Political parties: However, in 2017, the MHA, through the Finance Bill Route, amended the repealed FCRA Act of 1976 to allow political parties to obtain funding from Indian subsidiaries or foreign organizations so that an Indian could hold 50% or more. More shares.
And how can one get foreign funds?
- Prior permission: Another way to get foreign grants is to apply for prior permission.
- A letter of commitment from a foreign donor stating the quantity and purpose is also required.
- Specific activities or projects: It is paid for receiving a certain amount from a specific donor for a specific activity or project.
- Registration: But the association must be registered under an Act like section 25 of the Societies Registration Act, 1860, Indian Trust Act, 1882, or the Companies Act, 1956.
When is a registration suspended or canceled?
- MHA: FCRA may suspend registration for an initial period of 180 days upon inspection of the account and upon receipt of any adverse input against the functioning of an association.
- The MHA may cancel the registration of an organization that is not eligible for registration or ‘prior permission’ for three years from the date of cancellation.
- 25% of quantity available: Until a decision is made, the association cannot accept any new grants and cannot use more than 25% of the amount available in the designated bank account without the permission of MHA.