This Article is From May 20, 2021

Open FCRA Accounts For Non Profits Within 10 Days Of Approval, High Court Tells State Bank

Some NGOs informed the court that despite receiving approval from Ministry of Home Affairs, SBI was delaying opening of accounts under the Foreign Contribution (Regulation) Act (FCRA).

Open FCRA Accounts For Non Profits Within 10 Days Of Approval, High Court Tells State Bank

Under the amended FCRA, the account has to be opened exclusively in SBI

The Delhi High Court on Thursday directed the State Bank of India (SBI) to ensure it opens FCRA accounts for NGOs within 10 days of receiving approval from the Centre. The direction was issued by Justice Rekha Palli after the court was informed by some NGOs that despite receiving the approval from the Ministry of Home Affairs (MHA), SBI was delaying opening of accounts under the Foreign Contribution (Regulation) Act (FCRA).

The court was told that the bank was not operationalising the FCRA accounts in time, even after the necessary approval certificate was submitted to it, and it was leading to delay in receipt of foreign contributions. "Why are you waiting for days to do that," the court said to the bank and directed it to ensure that in future it will operationalise the FCRA accounts within 10 days of receipt of approval from MHA.

Meanwhile, the MHA, represented by central government standing counsel Manish Mohan, told the court that it has extended till June 30 the deadline for NGOs to open FCRA accounts. It also told the court that "validity of registration certificates issued to the NGOs which expired or would expire between September 29, 2020 to September 30, 2021 have been extended upto September 30, 2021".

Besides that the time limit for online submission of annual returns for the year 2019-20 has also been extended to June 30 from the earlier date of December 31, 2020, the MHA said in an affidavit filed in the court. The affidavit was filed in response to the court''s suggestion on May 13 to consider extending the deadline for NGOs to create an FCRA account to receive foreign contribution.

The court's order had come on the pleas by two NGOs which had not received approval of MHA despite applying for and opening an FCRA account in the State Bank of India (SBI) in accordance with the amended provisions of the Foreign Contribution Regulation Act (FCRA).

Under the amended FCRA, the account has to be opened exclusively in SBI as against the earlier position when such accounts could be opened in any scheduled bank. According to the amended Act, the deadline for opening such an account was April 1, 2021.

"In these pandemic times, they need money and if money is coming in from any foreign sources, that should not be stopped because people need a lot of help right now." the court had said on the earlier date.

The court had also said that non-receipt of contributions by these NGOs would lead to non-rendering of services by them and during the pandemic situation "there is enormous need for such services to the society".

The observations and directions of the court had come on the plea by two NGOs -- Comfort Ministries and Mothers Touch Charity Foundation -- which were seeking MHA approval for receiving foreign contributions and also extension of the deadline for opening the FCRA accounts. 

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