Nearly 19,000 NGOs have opened SBI accounts under FCRA till now

Out of 22,830 non-governmental organisations (NGOs) registered under the Foreign Contribution (Regulation) Act (FCRA) in India, nearly 19,000 had opened bank accounts with the State Bank of India (SBI) till early this month, said people aware of the matter.

The government has extended till December 31, 2021, the deadline for NGOs to open bank accounts with the designated SBI branch to ensure smooth transition to the amended FCRA, 2020.

Officials said that with a large number of NGOs already registered with the SBI, a fresh extension is not required, but they might consider requests from philanthropic groups for another month, considering the ongoing pandemic and winter break in foreign offices of some of these organisations.

FCRA 2020 mandates that each NGO compulsorily opens an 'FCRA account' with SBI's main branch in New Delhi for initial receipt of foreign contribution from a foreign source.

Between 2016 and 2020, the home ministry had cancelled the registrations of more than 6,600 NGOs, alleging violation of rules and misuse of funds. "Such NGOs are not allowed to receive and utilise any foreign contribution, but they are eligible to apply for fresh registration after the three years from the date of cancellation of their registration," explained a senior official.

As per the home ministry, the annual inflow of foreign contribution to NGOs was more than ₹58,000 crore between 2016-17 and 2018-19.

In July this year, the Delhi High Court "restrained" the ministry from taking any "coercive" action against NGOs if they failed to file annual returns after June 30, 2021. The order was passed on petitions from NGOs, in which they expressed their inability to file their returns under FC-4 Form for the year 2019-2020, as the online system, introduced under amended FCRA Act 2020, accepts the entry only if the account is in SBI's New Delhi main branch.

NGOs have said that they have been contributing enormously to India's GDP and provide livelihood to millions, both through direct employment and social giving. Their role, which can range from service delivery and welfare work for community development, to promoting democracy, human rights, equitable governance and citizens' participation, is particularly significant in view of the low social sector spending in India. Non-profit organisations have played a particularly crucial role in serving the needs of the community during the Covid-19 pandemic.