Monday, 10 October 2016

Proposed Amendment to FC Rules

The government's obsession in regulating 'foreign funding' is now starting to borders around paranoia and moving from 'regulation' to 'control'. It's unhealthy, to say the least.

Reportedly the Ministry of Home Affairs may soon require all NGOs registered or granted prior permission to receive foreign funds under the Foreign Contribution (Regulation) Act, 2010, to allow the Central Government to access details of their FCRA Bank accounts in real time.

According to amendments proposed by the Union Home Ministry to the Foreign Contribution (Regulation) Rules (FCRR), 2011, NGOs may have to give their consent in writing at the time of applying for registration or prior permission, and also during the renewal of the FCRA license.

The move is not only aimed at enabling tighter monitoring of NGOs' foreign receipts, but also keeping track of their utilization.

Right now, MHA depends on banks to give them details within 48 hours of any transaction. This proposed amendment will allow the Centre to readily access and examine the FCRA accounts of an NGO under scrutiny, through authorized agencies like the Intelligence Bureau, the RAW or the FCRA monitoring unit of the Home Ministry.

Another key amendment proposed to the FCRR would require all NGOs to maintain their FCRA accounts in banks with a core banking system. Reportedly, of the over 33,000 licensed NGOs, around 5,000 to 6,000 maintain their FCRA accounts in small cooperative banks that do not have core banking.

The third amendment under consideration seeks to limit the prior permission route to just two transactions/projects after which it will be mandatory for the NGO to apply for regular registration under FCRA.

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