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FCRA Bank Account

Q.1 Are there any specified banks for the purpose of FCRA 2010?

Ans. No. However it should be a scheduled bank, i.e., any of the banks included in the second schedule of the RBI Act, 1934, authorised to deal with the foreign exchange.

Q.2 Whether an association needs open an exclusive FC A/c before submission of an application for registration or prior permission?

Yes. Since the FC A/c through which foreign contribution is proposed to be received and utilised is to be mentioned in the application seeking registration or prior permission, as the case may be, the association should open such an exclusive FC A/c with a Bank. This A/c number would be mentioned in the letter granting registration or prior permission to the association.

Q.3 Whether Banks should allow an association which is applying for registration or prior permission under FCRA, 2010 to open an exclusive FC A/c with INR?

Ans. Yes. However, the Banks should not allow any foreign inward remittance in that A/c till such time the association is granted registration or prior permission, as the case may be.

Q.4 Should the Banks report transactions pertaining to foreign contributions which are returned to the remitter by the beneficiary Association for want of registration/prior permission from MHA?

Ans. It is not necessary for the bank to report such foreign contribution that is returned to the donor without crediting in the account of the recipient.

Q.5 Should the Banks report transactions pertaining to foreign contributions which are returned back to the remitter by the beneficiary Association for want of registration/prior permission from MHA?

Ans. It is not necessary for the bank to report such foreign contribution that is returned to the donor without crediting in the account of the recipient.

Q.6 Whether reporting by Banks is also applicable for transfer of funds between FCRA accounts of two or more associations?

Ans. Yes. Reporting by Banks is also applicable to transfer of funds from one FCRA registered Association to another.

Q.7 Minimum Balance requirements in FC Accounts?

Ans. There is no such requirement under FCRA, 2010.

Q.8 Whether Banks should credit any foreign contribution received by an association to its account even if the association does not have registration/prior permission from MHA and subsequent reporting can be made by Banks to MHA?

Ans. Rule 16 (1) of FCRR, 2011 states that every bank shall send a report to the Central Govt. within 30 days of receipt of foreign contribution by any person who is required to obtain a certificate a registration or prior permission under the Act, but who was not granted such certificate or prior permission on the date of receipt of such remittance. Further, Rule 16(3) prescribes that the banks shall send a report to the Central Govt. within 30 days from the date of such last transaction in respect of receipt of any foreign contribution in excess of Rs.1 Crore or equivalent thereto in a single transaction or in transactions within a duration of 30 days, by any person whether registered or not under the Act. In view of the above, it follows that bank may credit any foreign contribution received by an Association without registration or prior permission. However, while the banks can prevent such a situation in cases where a cheque is presented by the recipient of foreign contribution for deposit in its savings/current account, it may not always be possible when the foreign remittance is through wire transfer. Therefore, in all such cases, besides sending a report to MHA as per Rule, the bank should not allow any withdrawal or transfer or utilisation of the FC amount till such time the Association produces documentary evidence from MHA permitting it to do so.

 Now, you can make a call back request for FCRA advisory i.e. available to all NGOs & Banks for FREE by Ozg Law.

Ozg services includes –

=> Detailed assessment and advisory on status of compliance with provisions of FCRA 2010 and FCRR 2011.
=> Advisory on returns and information submitted to Ministry of Home Affairs (MHA) in terms of compliance with the Act and Rules.
=> Advisory on maintenance of proper and prescribed books of accounts in compliance with provisions of Act and Rules.
=> Guidance on steps to be initiated for advance preparation of application for renewal of FCRA registration.
=> Advisory on present constitution of governing body in terms of compliance with Act and Rules.
=> Advisory on the relationship of your NGO with its donor organizations within the frame of rules and acts of FCRA.
=> Advisory on designated FCRA bank account operations.

===> Email: ask@fcra.in

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