FCRA registration and opening of bank account for NGO extended.

The validity of registration certificates of NGOs registered under the Foreign Contribution and Regulation act, which have expired anytime after September 29th, 2020 are still valid until September 30, 2021. This was extended by the Ministry of Home Affairs(MHA), keeping in mind the restrictions imposed due to Covid-19. 

For the opening of FCRA bank accounts in the State Bank of India, New Delhi Ministry of Home affairs extended the deadline to June 30.

Any donations received by the NGOs from any foreign source even if the contribution was made from India have to be considered as a foreign contribution. Under the new provision, it is mandatory to place such funds in a designated bank account of the State Bank of India in New Delhi. The government passed it owing to transparency and regulating the NGOs so that the money is not misused by some organizations. The Foreign Contribution and Regulation Act(FCRA) first enacted in 1976 was amended in the year 2020 during the first wave of the pandemic. The ministry of home affairs is the governing body and it has asked the banks to submit a report to the central government of any receipts or utilization of the foreign funds by any NGO, an association, or any person whether they are granted permission by FCRA or not. 

The time extension provided for registration aids the NGOs to get used to the new scheme amended in 2020. This will make the smooth transition from the old regime to the new regime. As opposed to the problems faced by NGOs as they are not able to supply the necessary aid for treating Covid-19 in some places because of the new amendment. Even though the government intends to regulate the structure of foreign contribution monitoring, it is not serving the main purpose of service at the moment. Help is pouring in from different parts of the world to battle the second wave of pandemic erupted in India and the support and relief provided by foreign sources to NGOs are not being utilized as the restrictions made in the amendment and the process of approval and having bank accounts is delaying the process.

This problem was brought up in the Delhi High Court and how the State Bank of India is not granting the FCRA accounts in time after receiving approval from the Ministry of Home affairs. The court has now directed the State Bank of India to make sure they open FCRA accounts for NGOs receiving approval from the Ministry of Home Affairs within 10 days. This comes along with the extension of the deadline for opening bank accounts for NGOs till June 30.

The NGOs are playing a major role in tackling the problems and in assisting in multi-dimension in overcoming the pandemic. The working of such voluntary organizations has to be made simpler at least for the moment as this will help in the process of functioning of the organizations as well as the smooth flow of necessary resources required for covid-19 patients. This will also encourage more and more people to come forward and rise to the occasion of National need, rather than discouraging them and having them buried with rules and restrictions. 

Following which new regulations are made in the future should consult the members of the organizations who are involved in the fieldwork, this will show a deeper look into the issues faced by NGOs. This will create more transparency in the functioning of the organizations and will help in the structuring of regulations.

Sources: Economic Times

Image Source: New Indian Express Sattva