Home Ministry mulls changes in foreign funding rules for NGOs

At the time of opening the foreign contribution account, the NGO has to give its consent for the government to access its account whenever required.

By: Espress News Service | New Delhi | Updated: October 4, 2016 4:00 am
NGO foreign funding, foreign funding, ngo foreign funds, Foreign Contribution Regulation Rules, india news Ministry officials said that some banks currently update their intranet systems with transaction data of foreign contribution designated accounts only once in 24 hours. (Source: File)

The Home Ministry is planning to introduce amendments to the Foreign Contribution Regulation Rules, 2011, making it mandatory for all NGOs receiving foreign funds to have foreign contribution designated accounts only in banks linked to core banking system. Also, at the time of opening the foreign contribution account, the NGO has to give its consent for the government to access its account whenever required.

“There are about 33,000 NGOs in the country. Around 27,000 of them have foreign contribution accounts that are linked to core banking system and therefore to Home Ministry through Public Financial Management System (PFMS). The remaining NGOs are out of the realm of core banking system. The amendments being introduced to FCRR 2011 will mandate that all foreign contribution designated accounts will have to be opened only in banks linked to the core banking system,” said a Home Ministry source.

“At the time of opening a foreign contribution account, the NGO also has to give its consent to a clause that will allow the government to access the account whenever necessary. Only a few designated senior officials, however, will be able to access it. This will allow the government to ensure that foreign funds received by an NGO are used only for the purposes stated,” said the source.

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The Indian Express had earlier reported that in a bid to keep a track of foreign funds received by NGOs on a ‘real-time basis’, the ministry had approached the RBI to instruct all banks to link designated foreign contribution accounts to the Home Ministry’s online database through the crore banking system and PFMS.

Ministry officials said that some banks currently update their intranet systems with transaction data of foreign contribution designated accounts only once in 24 hours. The MHA, however, wants automatic updates on any activity regarding these accounts.

As reported earlier, the MHA is also planning to bring a norm, under which an NGO would be able to receive foreign funds only twice by obtaining prior permission from the government without registering under Foreign Contribution Regulation Act (FCRA).

Sources said the move was prompted by a preliminary inquiry by the ministry which revealed that Amnesty International India received foreign funds in four installments since 2000 without having registered under the FCRA but by seeking government permission each time.

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