Foreign Contribution (Regulation) Act

Foreign Contribution (Regulation) Act (FCRA) 2010

#GS-02 Governance

The act makes it mandatory for all NGOs to receive foreign funds in a designated bank account at the State Bank of India’s New Delhi branch was inserted.
All NGOs seeking foreign donations have to open a designated FCRA account at the SBI branch.
No funds other than the foreign contribution should be received or deposited in this account.
The NGOs can retain their existing FCRA account in any other bank but it will have to be mandatorily linked to the SBI branch in New Delhi.
Foreign contribution has to be received only through banking channels and it has to be accounted for in the manner prescribed.
Under the Act, organisations are required to register themselves every five years.
NGOs are expected to apply for renewal within six months of the date of expiry of registration.
In case of failure to apply for renewal, the registration is deemed to have expired.
It barspublic servants from receiving foreign contributions.
Aadhaar number is mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document.

It allows Indians to receive up to Rs 10 lakh (from 1 lakh earlier) annually from their relatives abroad under FCRA.
If the amount exceeds, the individuals will now have 90 days to inform the government instead of 30 days earlier.
It has given individuals and organisations or NGOs 45 days (from 30 days earlier) for the application of obtaining ‘registration’ or ‘prior permission’ under the FCRA to receive funds.
Made five more offences under the FCRA “compoundable”, to a total of 12, instead of directly prosecuting the organisations or individuals.
While NGOs earlier could use up to 50% funds for administrative use, the new amendment restricted this use to 20%.