India tightens oversight on funds received by NGOs

The Ministry of Home Affairs (MHA) has laid down a constitution for banks which says that “donations received in Indian rupees” by non-governmental organisations (NGOs) and associations from “any foreign source even if that source is located in India at the time of such donation” needs to be handled as “foreign contribution”.

As per the prevailing guidelines, all banks should report back to the Central authorities inside 48 hours, the “receipt or utilisation of any foreign contribution” by any NGO, affiliation or particular person whether or not or not they’re registered or granted prior permission beneath the FCRA.

The Hindu Explains | What is Foreign Contribution (Regulation) Act, and how does it control donations?

Last September, the Foreign Contribution (Regulation) Act, 2010, was amended by Parliament and a brand new provision that makes it obligatory for all NGOs to obtain overseas funds in a delegated checking account on the State Bank of India’s New Delhi department was inserted.

FCRA regulates overseas donations and ensures that such contributions don’t adversely have an effect on the interior safety of the nation.

All NGOs looking for overseas donations should open a delegated FCRA account on the SBI department by March 31.

Also learn | Home Ministry amends FCRA rules

The NGOs can retain their present FCRA account in another financial institution however it must be mandatorily linked to the SBI department in New Delhi.

Penal provisions

The Ministry has laid out a sequence of pointers and constitution to make the NGOs and the banks adjust to the brand new provisions.

The constitution for the banks stated, “It may be noted that foreign contribution has to be received only through banking channels and it has to be accounted for in the manner prescribed. Any violation by the NGO or by the bank may invite penal provisions of The FCRA, 2010.” It added that “donations given in Indian rupees (INR) by any foreigner/foreign source including foreigners of Indian origin like OCI or PIO cardholders” also needs to be handled as overseas contribution.

Also learn | ‘FCRA Bill virtually makes it impossible for NGOs to function’

Recently the National Investigation Agency (NIA) registered a case towards Sikhs for Justice (SFJ), a overseas based mostly group that advocates secessionist and pro-Khalistani actions in India.

NIA summoned 40 folks, all related to the continuing farmers agitation, to hitch the probe within the case the place it alleged that enormous quantities of funds being collected by Khalistani terrorist outfits are being despatched via NGOs to pro-Khalistani components based mostly in India.

In 2019, MHA had amended FCRA guidelines the place it stated that even individuals prohibited to obtain overseas funds corresponding to journalists, politicians, members of the judiciary “are allowed to accept foreign contribution from their relatives” if the quantity doesn’t exceed ₹1 lakh. Any such transaction above ₹1 lakh must be told to MHA.

MHA additionally stated down “good practices” to be adopted by NGOs in accordance with requirements of world monetary watchdog- Financial Action Task Force (FATF). It requested NGOs to tell the Ministry about “suspicious activities” of any donor or recipient and “take due diligence of its employees at the time of recruitment.”

FCRA regulates overseas donations and ensures that such contributions don’t adversely have an effect on the interior safety of the nation. The Act, first enacted in 1976 was amended within the 12 months 2010 after which 2020.