BANK
ACCOUNT, INVESTMENT
& FIXED ASSETS
Opening of Bank Account
As per Section17 (1), every organisation, which has either
registered itself with the Central Government in accordance
with the FCRA rules or has obtained prior permission,
shall receive foreign contribution only through one
such bank
account as specified in its application for registration
for prior permission.
Form FC-3 and Form FC-4 which deals with the application
for registration and prior permission respectively; require
the mention of separate bank account number and the branch
of the bank in which the Foreign Funds will be received.
No funds other than foreign contribution shall be received
or deposited in the above bank accounts.
Change
of Bank Account
Further,
Form FC-3 & FC-4
requires an undertaking from the chief functionary of
the organisation. The relevant text
of the undertaking is as follows, “not to
change the bank or branch of the bank without prior
permission of the
Central Government. The reasons for change of bank
or branch of bank shall have to be relevant and
justifiable”.
In the light of aforesaid, it seems that there
can be only one bank account of the association
for receipt of foreign
contributions and there should not be any change
in the bank or branch of the bank without prior
permission of the Central
Government.
Procedure for change of Bank Account
When a change of bank account becomes a necessity
by virtue of relevant and justifiable reasons
the following
procedure
may be followed:
(i) A new bank account which is proposed to
be designated bank account should be opened
by depositing the minimum
amount required for opening of the account
which should be out of
local funds.
(ii) An application to the FCRA authorities
should be made by citing the relevant
and justifiable reasons
for
such
change along with complete details of
the old account as well as the new account
should be provided in the application
(iii) After receiving the permission
from FCRA authorities, the entire balance
from the old designated account should
be
transferred
to the
new account.
(iv) It is not necessary to close the old account. Therefore,
the organisation may use the old account as a domestic
account. But
it is desirable to
close the old account, to ensure that even by mistake
the foreign funds are not
credited to the old account
The FCRA department has given a correction form for the
change in bank account, which is given in Annex. 1
Change in signatory of bank account
Change in signatories of bank accounts is a routine
procedural issue and therefore need not be informed
to the FCRA
authorities. The undertaking
given by the
Chief functionary in the form FC-3 for informing
the changes in the bank account is
only about change of the bank or branch of the bank.
Any procedural changes in the same bank account do
not require
an approval
of the FCRA authorities.
Change in account number due to computerization
Many designated FC bank account numbers have been
changed due to computerization. In such cases,
it is advisable
to inform
the FCRA
authorities about such
changes. The new account number should be used
for all subsequent reporting and correspondence
purposes.
Separate Bank Account for Separate Donors
It has been seen that some donors insist of maintenance
of separate bank account specifically for
their grant and utilisation
thereof.
But under
FCRA, all foreign
contribution should be received in one designated
bank account only. Therefore, under no circumstances,
separate
bank account
should be opened
for receiving
funds from various donors. However, for UTILIZATION
purpose separate bank account can be opened
for separate donors.
Having more than one account for project
purposes
The person may open one or more accounts
in one or more banks for the purpose
of utilizing the
foreign
contribution
after
it has
been received
and, in
all such cases, intimation on plain paper
shall be furnished to the Secretary,
Ministry of Home
Affairs,
New Delhi
within fifteen
days of the opening
of any
account.
Interest Earned is part of foreign contribution
The interest accrued on the foreign contribution
deposited in any bank or any other
income derived from the foreign
contribution or interest
thereon shall
also be deemed to be foreign contribution.
Reporting by banks of receipt of
foreign contribution
Every bank shall send a report
to the Central Government within
thirty
days
of any transaction
in respect
of receipt of foreign
contribution
by any person
who
is required to obtain a certificate
of registration or prior permission
under
the Act, but who
was not granted
such certificate
or prior
permission as
on the date of receipt of such
remittance.
The report shall contain the
following details: -
(a) Name and address of the
donor.
(b) Name and address of
the recipient.
(c) Account number.
(d) Name of the Bank and
Branch.
(e) Amount of foreign contribution
(in foreign currency as
well as Indian Rupees).
(f) Date of receipt.
(g) Manner of receipt of
foreign contribution (cash/cheque/electronic
transfer etc.).
The bank shall send a report
to the Central Government
within thirty
days from the
date of such last
transaction in respect
of receipt
of any foreign
contribution
in excess of one crore
rupees or equivalent thereto
in
a single transaction
or in
transactions within
a duration
of
thirty
days, by any person, whether
registered
or not under the
Act
and such report shall include
the following
details:-
(a) Name and address
of the donor.
(b) Name and address
of the recipient.
(c) Account number.
(d) Name of the Bank
and Branch.
(e) Amount of foreign
contribution (in foreign
currency as
well as Indian Rupees).
(f) Date of receipt.
(g)Manner of receipt
of foreign contribution
(cash/cheque/electronic
transfer
etc.).
Creation of fixed deposits
As
far as the creation of fixed deposits of
FCRA funds
is concerned,
there
does not seem to
be any bar on
it. All the
funds are
required to be received
in the
designated bank account
but any temporary
surplus funds
may be
placed in fixed
deposits with the
bank, pending
utilisation
for
the objects
for which
they
were received. Care
should be taken that
the investment
are
in compliance
with
the section 11(5)
of the Income Tax Act.
In this context, it
may further be
noted that,
since, the
interest earned
is considered
as FC
receipts
such interest
earning should
be deposited
in the
designated bank
account.
Creation of Fixed
Assets
Any asset created
out of foreign
funds should
be
recorded in the
FC books of
account only.
And FC
asset will
continue to
remain
an FC asset irrespective
of time factor
or closure of
the project.
At
times it may
so happen
that a
portion
of the asset
is funded from
domestic
sources.
For instance,
a building
constructed on a land
purchased
from domestic sources.
In
such cases,
the cost
of the land should
be reflected
in the domestic
books of
account and the
cost of the
building should
be shown
in the
FC books
of account. Only
the consolidated,
statement
will show the total
cost
of land
and building
together.
Sale of fixed
assets
If
an asset purchased
out of
FCRA
funds is
sold,
then
the amount
received
on
sales
of such asset
should
be shown
as foreign
receipts.
There
might be circumstances
where
assets are created
out of
both
FCRA
as well
as domestic
funds.
In
such
cases, apportionment
of
the
sale
receipts should
be made
on a
suitable and
reasonable
basis
out of the
sale
consideration
receipt
and the
amount,
pertaining
to foreign
contribution
portion
of the
asset
should be considered
as
foreign
contribution
receipt.
The funds
generated
from
a FC asset
being
a FC
receipt
should
be
deposited in the
designated
bank
account.
Annexure:
1
Application form for change of Bank Account/Bank
[Application
form for seeking change in the designated Bank Account/Bank
of the association granted registration/prior permission under FCRA.
No.....................................................................
Date.......................................
To
The Secretary to the Government of India
Ministry of Home Affairs, Jaisalmer House,
26, Man Singh Road, New Delhi-110 011
Subject : Application for change in the designated Bank/
Bank Account of association registered/ granted prior permission
under Foreign Contribution (Regulation) Act.
Sir,
I ____________________ on behalf of the Association, whose
details are given below, apply for change in the designated
Bank Account/Bank of association registered/granted prior
permission under the Foreign Contribution (Regulation)
Act,1976/Foreign Contribution (Regulation) Act, 2010.
1.
Name of the association and its complete postal address:
Name
:
Address :
Town/City :
District :
State :
PIN Code :
Phone/Fax No.:
e-Mail :
2.
FCRA Registration No./Prior Permission letter No..............................dated...................
(Copy of the registration/prior permission letter
to be enclosed)
3.
Nature of Association:
(a)
religious (b) cultural (c) economic (d) educational (e)
social
Note
: If religious association, state whether – (a)
Hindu (b) Sikh (c) Muslim (d) Christian
(e) Buddhist (f) Others.
4.
Name and addresses of the members of the
Executive Committee/Governing Council
etc. of the association, including the Chief
functionary in the following manner:
| Sl.
No |
Name |
Name
of Father/ Husband |
Nationality |
Occupation |
Office
held
in the
association |
Relationship
with office
bearers, if
any |
Address |
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5. Please indicate date of submission of Last three Annual
FC-3 returns.
6.
Please indicate whether the Association Is functioning
as editor,
owner, printer or publisher of a Publication required
to be registered as ‘newspaper’ under the Press
and Registration of Book Act, 1867.
If so, the details thereof.
7.
Please indicate whether the association has close links
with another association, or its unit or branch which has
been-
(a)
refused registration under the Act;
(b) Prohibited from accepting foreign contribution.
8.
Please indicate- Existing Proposed
(i) The name and address of the branch of the bank through
which foreign contribution is to be received.
(ii) The account number in the said branch of the Bank.
9. Justification for proposed change
Yours faithfully,
Signature of the Applicant
(Name of the Chief Functionary or authorised office Bearer)
(with the seal of the association)
Declaration and Undertaking
I hereby affirm that the information furnished above is
correct.
Place:
Date:
Signature of the Applicant
(Name of the Chief Functionary or authorised office Bearer)
(with the seal of the association)
Instructions:
