The FCRA account at SBI New Delhi and utilisation accounts

Under Section 17 of the Foreign Contribution (Regulation) Act, 2010 (FCRA), an NGO may receive foreign contribution only in a bank account designated “FCRA Account” at the State Bank of India’s New Delhi Main Branch (NDMB). From there it may move the money to one other FCRA account and to utilisation accounts at other banks to spend it, but no other money may ever be paid into any of these accounts.

The rule is simple to state and easy to break: a single foreign donation made through an online donation page into an ordinary account is a breach. This guide explains how to open the New Delhi account from anywhere in India, how the other accounts work, what can and can’t go into them, and how to report changes. It is for NGO finance staff and treasurers, and for foreign donors’ India teams.

The rule: one front door in New Delhi

The branch the government has specified is SBI’s New Delhi Main Branch, 11 Sansad Marg, New Delhi. Before the 2020 amendment, an organisation could receive foreign contribution at a bank branch of its choice. The Ministry of Home Affairs (MHA) set 31 March 2021 as the deadline to open the New Delhi account, in a notice of 13 October 2020; the deadline was later extended to 30 June 2021, and since then foreign contribution can be received only there.

The account comes first in another sense too. Section 12(1A) requires an applicant to open it before applying for registration or prior permission, and to give its details in the application. Opening it doesn’t let you receive anything: until the MHA grants registration or permission, accepting foreign contribution is an offence.

Opening the account without going to Delhi

The MHA has said that organisations anywhere in India can open the New Delhi account without visiting it, by approaching their nearest SBI branch or another branch of their choice. In outline:

1. Get SBI’s account opening form for the FCRA Account from the branch or from SBI’s website.
2. Collect the KYC documents SBI asks for, including those of the people who will sign for the account and of the organisation’s controlling persons or beneficial owners.
3. Submit them through the branch, following SBI’s current procedure for opening the account at the New Delhi Main Branch.
4. Keep SBI’s confirmation and the account details: you’ll need them for your application, your annual returns and your foreign donors.

SBI’s checklist can change, so confirm it with the branch before you go. Organisations that already had an FCRA account at another bank in 2020 could keep it and link it to the New Delhi account, the MHA said at the time.

The three kinds of account

PFMS is the Public Financial Management System, the government’s system for tracking payments. The MHA requires the other FCRA account and every utilisation account to be at a branch linked to it.

Money flows one way: from donors into the New Delhi account, then, if you choose, to your other FCRA account and on to utilisation accounts, and out as payments for your own work. Interest earned on foreign contribution is itself foreign contribution, so it stays in the FCRA accounts. Fixed deposits made from foreign contribution are allowed, because secure debt investments aren’t speculative; record them in your register of investments.

What may and may not go into an FCRA account

Getting it wrong either way is a breach. Foreign contribution in an ordinary account breaks Section 17, and so does Indian money in an FCRA account. If you’re unsure whether a donor counts as foreign, check who counts as a foreign source before the money moves.

How banks and the MHA see your accounts

• Banks report. The FCRA Rules require banks to report to the government, within 48 hours, any receipt or use of foreign contribution by any person, whether or not that person is registered. A foreign donation into an unregistered organisation’s ordinary account doesn’t go unnoticed.
• The annual return shows the rest. Form FC-4 reports receipts and use of foreign contribution each year, with a chartered accountant’s certificate. See compliance and renewal.
• The MHA can audit. Under Section 20, if returns are late or wrong, or it suspects a breach, the MHA can have the organisation’s books audited by an officer or body it authorises.

Changing or adding accounts

All three are filed online on fcraonline.nic.in. The deadline was 15 days until 1 July 2022, when the MHA extended it to 45.

Common mistakes

• A foreign donation lands in an ordinary account, often through an online donation page, a payment gateway or a crowdfunding platform. Set up online giving so that foreign citizens can’t give into your ordinary account, or so that their gifts reach the FCRA Account. Compounding this breach costs ₹1 lakh or 5% of the amount, whichever is higher.
• Indian money goes into an FCRA account, such as CSR from an Indian company, a gift from an Indian citizen abroad, or the takings from a local event.
• A utilisation account at the wrong branch, one not linked to PFMS, or opened without Form FC-6D within 45 days.
• Paying a partner from an FCRA account. Passing foreign contribution to another organisation is a transfer, which Section 7 bans: see using foreign contribution.
• Old account details in donor records. A foreign donor with pre-2021 bank details will pay into the wrong place. Update every donor, and check the bank details in each new grant agreement.
• Paying foreign-funded costs from local money and “reimbursing” later. That moves foreign money into a local account. Plan cash flow so that foreign-funded costs are paid from FCRA accounts, and take advice before making any adjustment between the two.