NGOs say opening an account with SBI in Delhi is a seven-step process.
The Ministry of Home Affairs (MHA) informed the Delhi High Court on Thursday that it would release authorisation certificates to operationalise the FCRA (Foreign Contribution [Regulation] Act) bank accounts of non-government organisations (NGOs) within seven days of receiving a request.
The court was hearing a petition moved by 10 NGOs that their foreign contribution account in the State Bank of India’s main branch in Delhi be operationalised.
The NGOs said opening an account with the SBI in Delhi was a seven-step process involving both the bank and the Ministry, but there was no accountability.
Even if an NGO had applied before the earlier deadline of March 31, the accounts were not operational for want of an FC6C certificate. After NGOs moved court, the deadline was extended to June 30.
Amid a slew of amendments to the FCRA, 2010, which the Ministry introduced last year in Parliament, it made form FC6C—-an authorisation certificate mandatory to operationalise a bank account with the SBI main branch in Delhi, another compulsory requirement.
The SBI, in a press release on May 17, said that “out of the total 22,598 active FCRA associations, 17,611 entities (NGOs and Associations) approached SBI for opening of FCRA accounts.” It claimed that it had opened accounts of 78% of the applicants.
“There is a difference between opening an account and operationalising it. The SBI opened the account but it cannot function till the bank receives an authorisation certificate from the ministry. There were no clear time lines, the ministry has now undertaken that if all the papers are complete, it will release the certificate within seven days,” said NGOs’ lawyer Abishek Jebaraj.
On Thursday, the SBI told the court that it would open FCRA accounts within 10 days of receiving a request.
Members of the NGO community said the government had given an additional 40 days for NGOs to open bank accounts but it only affected those whose bank accounts were not opened, which is now only 5,000 out of 22,000.
“This needs to be extended to cases where accounts are not operationalised and extended till September 30. So the 17,000 NGOs cannot receive money in their old account, as it will be frozen by the banks, but their new account [with SBI] is not operational for want of approval by the ministry. The FCRA amendments introduced last September made it compulsory for the SBI to not operationlaise an NGO’s account without the MHA’s authorisation. Earlier, NGOs had to only intimate the ministry about any change of bank account,” Dhaval Udani, founder of DanaMojo, an online payment platform for NGOs, and ex-CEO of GiveIndia, stated.
The ministry has also given a relief to the NGOs whose registration was expiring between September 29, 2020-May 31,2021. They had to apply for renewal of certificates or registration by May 31, which has now been extended to September 30, the MHA said in an order.
“For more than 80% of NGOs, their renewal is due on October 31, and it is important to give them relief now since renewal applications as per law have to be filed six months before the expiry of the registration which has already passed,” Mr. Udani said.
Registered NGOs can receive foreign contribution for five purposes — social, educational, religious, economic and cultural. The FCRA registration is renewed every five years.
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