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Belated release of FCRA rules for getting foreign funds

KT NEWS SERVICE. Dated: 11/13/2020 1:17:17 PM

NEW DELHI, Nov 12: The Home Ministry has belatedly gazetted new rules on receipt of the foreign funds by individuals or organisation after more than a year of the amended Foreign Contribution (Regulation) Act on September 16 last year, barring those engaged in activities of political nature, if they participate in active politics or party politics.
The detailed rules, along with various forms to be submitted electronically, have been published in an extraordinary gazette on November 11, requiring receipts of all foreign funds only in the New Delhi main branch of the State Bank of India (SBI) at Parliament Street, New Delhi with IFSC No SBIN0000691.
A large number of the NGOs registered all over the country are already running around for fulfilling the requirement of making the deposits only in the SBI's New Delhi branch, declared mandatory a year ago, as the bank does not entertain them until they physically open the FCRA account as then only they can electronically transfer the money lying with them or lying in other banks. Only those from the capital are able to abide by the mandatory rule without any hassles.
Not only the NGOs, but even the individuals face harassment as the rules now require them to fill up a form declaring receipt of foreign contribution by way of gift from a relative or in the form of articles or securities by a candidate for election.
As many as 13 forms are attached to the rules. A separate form is prescribed for seeking prior permission of the Central Government to accept the foreign hospitality, giving details of cities, countries to be visited, purpose of visit, duration of stay at each place and approximate expenditure to be incurred. A separate form is to be filled up for acceptance of the foreign fund by a person or association having definite cultural, economic, educational, religious or social programmes.
The rules say any person seeking registration of his organisation should be in existence for three years and should have spent a minimum of Rs 15 lakh on its core activities for the benefit of society during the last three financial years. If he wants inclusion of the organisation's existing assets like land, building, vehicles, etc., he has to give an undertaking not to divert them for any other purpose till the validity of the certificate of registration. It also requires details of FCRA accounts furnished for entertaining an application for the registration.
The person or organisation has to take prior permission for receipts from the foreign donors, submitting a specific commitment from the donor indicating the amount and purpose for which it is proposed, provided the chief functionary of the recipient is not part of the donor organisation nor 75% of its office-bearers are members or employees of the foreign donor.
If the foreign grant is of over Rs 1 crore, the government may permit it in instalments, provided that the second and subsequent instalments shall be released after submission of proof of utilisation of 75% of the foreign contribution and after the field inquiry to check the utilisation. The renewal of certificate of registration, which is valid for five years, has to be sought within six months from the date of expiry of the certificate. No person whose certificate of registration has ceased to exist shall either receive or utilise the foreign contribution until the certificate is renewed.
An application for grant of prior permission requires deposit of Rs 5,000 in the government account and it shall be Rs 10,000 for grant of the registration. The renewal of the certificate of registration will also require deposit of a fee of Rs 5,000.
What happens to the amount of foreign contribution lying unutilised in the FCRA account? The rules say it shall vest with the prescribed authority until the certificate is renewed or fresh registration is granted by the Central Government. Every person can voluntarily surrender the certificate of registration in the electronic form.