Thursday, 28 December 2017

Don’t make haste in changing your FCRA Bank Account

MHA’s Notice of 21st December 2017 has created some flutter within the NGO circle. However, there is a silent but bigger flutter within the Banking Sector. MHA has published a list of just 32 Banks which are PFMS compliant. Several NGOs have their FCRA Bank account with major Foreign Banks which are high on compliance as also transparency, but, not part of the Public Financial Management System (PFMS).

To our amusement, some banks seem to have gone into overdrive and are making every effort to get the Public Financial Management System as soon as possible. After all even if it is now just about Rs 6,499 crore flowing into the country from various foreign sources, it’s not a small stake for the banks to lose out on.

We at CAP have our FCRA Bank account with a well-known foreign bank and when we approached them with the MHA Notices and request to move our Bank account to one of the 32 Banks, we were told that they will be in the list of PFMS Notified banks within about a week.

Hence, if you are satisfied with the services of your current bank which is not currently in the MHA’s list, please talk to them first if they are already in the process of getting PFMS compliant. If not, please move your FCRA account to any of the 32 banks listed by MHA.

Finally, even if your bank assures you that they will join the Public Financial Management System, please don’t be complacent or wait beyond another week or two. If your Bank fails to provide evidence of having joined the PFM System, please change your bank before 21st January 2018 and notify the change to MHA  in Form FC 6

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