Stories
SBI Seeks Clarity on Handling NGO Funds Under Proposed FCRA Changes
- •SBI supports the Foreign Contribution (Regulation) Amendment Bill but seeks clear rules for banks on handling NGO accounts when foreign donation permissions expire.
- •The bank asked for clarification on account freezing, operation, incoming payments, and treatment of existing balances and fixed deposits once government control is established.
- •SBI flagged a potential gap between registration cessation and bank notification, suggesting protection for transactions processed before receiving authenticated communication.
- •The bank proposed keeping funds in existing accounts under temporary restrictions, with transfer on specific order if government control becomes permanent.
- •SBI noted that 10,992 of its 25,432 FCRA-covered accounts are restricted, holding Rs 165.33 crore, and highlighted concerns for smaller associations missing renewal deadlines.
Key Questions Answered
SBI sought clear rules on how banks should handle an organization's accounts and deposits when its permission to receive foreign donations ends, specifically asking whether accounts should be frozen and who can operate them once government control is triggered.
SBI flagged a potential gap between the date an organization's registration ceases and the date a bank is officially informed, suggesting that restrictions should only take effect for the bank when it receives authenticated communication to protect prior transactions.
As of August 31, SBI had 25,432 accounts for organisations covered by the foreign funding law at its New Delhi main branch, out of which 10,992 were dormant, frozen, suspended or restricted with a combined balance of Rs 165.33 crore.
