Maintenance of Bank Accounts under FCRA

FCRA Designated Bank Account

Section 17 of the FCRA Act, 2010 states that  the  foreign contribution should be received only in the exclusive single FC account of a Bank (also called designated FC account), as mentioned in the order for registration or prior permission granted and should be separately maintained by the associations. Also, receiving contribution in any account other than the FCRA Designated Bank account is an offense under the Act. Such an account has no restriction over the utilization and therefore, utilization can be done directly from such account as well. Ministry of Home affairs dated 7^th October 2020 notified State Bank of India, New Delhi, main branch, Sansad Marg, Delhi-110001 as the branch for the purpose of opening the FCRA designated bank account.

But the FCRA Amendment Act, 2020 provides for three types of Accounts;

1. Statutory Designated Account: The FCRA Amendment Act, 2020 states that the designated bank account, in which all the foreign contributions are received, should be opened in the Sansad Marg branch of State Bank of India at New Delhi.
2. Defacto Designated Account: 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 their FCRA Account in the specified branch of State Bank of India at New Delhi, such bank account will become the “Defacto Designated Account”.
3. Utilization Account; Further, 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 SBI, New Delhi or kept by him in another FCRA Account in a scheduled bank of his choice:

Procedure for change of designated bank account.

For change of the bank account, intimation is to be given online in Form FC-6C within 15 days of such change. In case the organization shifts their designated bank account to the SBI, Sansad Marg branch Form 6C would need to be filed in case of such change.

Documents required to be uploaded:

1. Self-certified copies of letter from the existing bank and the new bank regarding the change.
2. Images of Chief Functionary signature.
3. Seal of the Association

Details Required to Intimate in  form FC-6C:

1. FCRA Registration/ Prior Permission number and date of the association:
2. Official telephone number of the association:
3. E-mail address of the association
4. Telephone/ mobile number of the Chief Functionary of the association:
5. Details of the new designated FC receipt-cum-utilization bank account of the association.

Method to be followed for Change of Designated Bank Account:

A SOP would be issued for facilitating opening of the designated bank account in SBI, Sansad Marg Branch and procedure for change of designated bank account at the FCRA portal.

Utilization Bank Account

One or more accounts (called Utilization Account) in one or more banks may be opened by the association for ‘utilizing’ the foreign contribution after it has been received in the designated FCRA bank account, provided that no funds other than that foreign contribution shall be received or deposited in such account or accounts.

Transfer of funds is allowed from the designated FC account of an Association to the multiple account or accounts opened for its utilization. However, no funds other than the funds (FC) received in the designated FC account shall be received or deposited in such multiple account or accounts.

Transfers between utilization Bank Account

The FAQs suggest that there is no bar in transferring foreign contribution between the utilization accounts. However, Association should preferably avoid such practice for keeping the accounting process simple. The banks should apply full diligence to keep track of the transfers. Therefore, in our opinion, it is suggested to avoid transfers between multiple Bank accounts to avoid unnecessary scrutiny from the FCRA Department

Intimations Regarding opening of Utilization Bank Account:

For seeking change in Board members of the association, intimation is to be given online in Form FC-6D within 15 days.

Documents required to be uploaded:

1. Images of Chief Functionary signature.
2. Seal of the Association.

Details Required to Intimate form FC-6D:

1. FCRA Registration/ Prior Permission number and date of the association:
2. Official telephone number of the association:
3. E-mail address of the association
4. Telephone/ mobile number of the Chief Functionary of the association.

Declaration Required for the Following:

1. The resolution of the governing body has been passed before effecting the changes;
2. None of the key members has been appointed in violation of sub-section (4) of section 12 of the Foreign Contribution (Regulation) Act, 2010 (42 of 2010).

Other Bank Related Issues 

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. Any procedural changes in the same bank account do not require an approval under FCRA 2010.

Change in account number due to computerization

Many designated FC bank account numbers have been changed due to computerization. In such cases, it is necessary 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 utilization 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 in form FC-6D shall be submitted online at the FCRA website 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