What is the News?
The FCRA (Foreign Contribution Regulation Amendment) Act, 2020 has affected the work of many NGOs. They are facing difficulties in receiving foreign funds.
FCRA Amendment Act, 2020:
- The amendment has made it compulsory for the NGOs to open an exclusive Bank account with the State Bank of India in New Delhi to receive foreign donations.
- The Ministry of Home Affairs had given the deadline of March 31st, 2021 to open this bank account.
What is the issue with this amendment?
- Firstly, a was petition filed in the Delhi High Court seeking exemption from the Union Home Ministry’s March 31 deadline to open an FCRA account with the SBI branch in New Delhi.
- Secondly, the petitioner argued that it had applied to open the account before the March 31 deadline.
- Thirdly, the administrative delays in approval by the bank and Ministry severely are causing many troubles for them. It restricted activities of NGOs including providing COVID-19 relief and paying urgent salaries of staff, and also affected its charitable and educational activities.
- Hence, the Delhi High Court has now issued a notice to Union Home Ministry for a reply.
About FCRA (Foreign Contribution Regulation Act):
- Foreign Contribution (Regulation) Act is an act of Parliament enacted in 1976 and amended in 2010 to regulate foreign donations. It aimed to ensure that such contributions do not adversely affect internal security.
- Coverage: It is applicable to all associations, groups, and NGOs which intend to receive foreign donations.
- Registration: An FCRA registration is mandatory for NGOs to receive foreign funds.
- Purpose: Registered NGOs can receive foreign contributions for five purposes — social, educational, religious, economic and cultural.
Source: The Hindu