Sources told NDTV that 1,222 non-profits would risk losing their foreign funding licence and face penal action for slipping on the rules. They had been cautioned about the violations and told to quickly validate the bank accounts in which they receive foreign funds.
The long list of defaulters, according to the 8 September order seen by NDTV, include Sri Ramakrishna Math, Ramakrishna Mission, Indore Cancer Foundation Charitable Trust, Madani Darut Tarbiyat and Coimbatore Christian Charitable Trust.
In the last three years, the government has almost halved the number of non-profits licensed to receive money from abroad from 40,000 to 22,000. Most of them were defunct but there are over 800 that were not allowed to renew their licence.
In addition, the government has also barred 1,000 NGOs from accessing their foreign contribution accounts for violations under the 2010 version of the Foreign Contribution Regulation Act. The law owes its origin to a legislation by the same name enacted during Emergency to clamp down on flow of foreign funds to civil society groups.
About 2,000 non-profits were sent notices earlier this year and told to send complete details about their bank accounts including the Indian Financial System Code of the bank branches. Most of them complied with this requirement.
The official said the government had taken a lenient view because it turned out that some non-profits banked with small cooperatives that did not have the requisite infrastructure. Under the law, banks have to report every penny received from abroad by non-profits within 48 hours.
"So there may have been some NGOs that needed to move to nationalised banks but this process can't be allowed to take months," he said.