Maintenance of Bank Accounts under FCRA

FCRA Designated Bank Account

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.

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

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:

When a change of bank account becomes a necessity by virtue of relevant and justifiable reasons the following procedure may be followed:

  • A new local  bank account should be opened by depositing the minimum amount required for opening of the account
  • The resolution of the governing body has been passed before effecting the changes.
  • Intimation of change in FCRA designated bank account in form FC-6C within 15 days of such change.
  • After receiving approval from the bank, the entire balance from the old designated FC account should be transferred to the new account.
  • It is not legally necessary to close the old account. Therefore, the organization 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.

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-6E 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-6E:

  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 all the key members of the association after change.

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-6 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

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