FCRA Bank Account Overview
The Foreign Contribution (Regulation) Act, 2010 (FCRA) regulates how NGOs and other organizations receive foreign donations. This includes how they open and maintain bank accounts for these funds.
FCRA Bank Account Rules
- Registration Requirement: Only organizations with a valid FCRA registration or prior permission can receive foreign contributions.
- Designated Account: All foreign contributions must be received in a designated FCRA account at a specific branch of State Bank of India (SBI).
- Separate Accounts: FCRA funds must be kept separate from domestic funds. Organizations can open utilization accounts at any scheduled bank to manage these foreign funds.
- Reporting: FCRA-registered entities must file annual returns electronically detailing their receipts and expenditures of foreign contributions.
Types of FCRA Bank Accounts
There are three main types of FCRA bank accounts:
- Statutory Designated Account: This is the mandatory account that all FCRA-registered entities must maintain at the designated SBI branch in New Delhi. It can only be used to receive foreign contributions.
- Defacto Designated Account (Optional): Organizations can open an additional FCRA account at any scheduled bank to hold the funds received in the Statutory Designated Account.
- Utilization Account: Organizations can open one or more accounts at any scheduled bank to manage and spend their FCRA funds. No domestic funds can be deposited into these accounts.
Documents Required for Opening FCRA Bank Account
The specific requirements may vary depending on the type of account and the bank. However, generally they include:
- FCRA registration certificate or prior permission letter
- Trust deed or Society registration certificate (for applicable entities)
- KYC documents (PAN card, address proof, ID proof) for the organization and its representatives
FCRA Bank Account Opening Procedure
The process for opening an FCRA account typically involves:
- Submitting an application form along with required documents to the bank.
- The bank will verify the FCRA registration and KYC details.
- Once approved, the bank will open the designated FCRA account at the SBI branch or the De Facto Designated Account at a chosen scheduled bank.
Conclusion
FCRA bank accounts ensure transparency and proper utilization of foreign contributions received by NGOs and other organizations. Understanding the different types of accounts and the regulations around them is crucial for organizations that handle foreign funds.
FCRA Bank Account FAQs
Is it compulsory to open an FCRA account in SBI?
Yes, a designated FCRA account must be opened at a specific branch of State Bank of India (SBI) in New Delhi. This is the only account you can use to receive foreign contributions.
Can FCRA accounts be opened in any bank?
There are two types of FCRA accounts: Statutory Designated Account: This mandatory account must be at the designated SBI branch. Utilization Account: These accounts can be opened at any scheduled bank to manage and spend your FCRA funds. However, you cannot receive foreign contributions directly into these accounts.
Is it needed to open a bank account before FCRA registration?
No, you don't need an FCRA bank account before registering under FCRA. However, you can only receive foreign contributions once your registration is approved and the designated FCRA account is opened.
What is the last date to open an SBI bank account for FCRA?
There's no specific deadline to open the designated FCRA account at SBI. However, it's recommended to open it as soon as possible after receiving your FCRA registration to avoid delays in receiving foreign contributions.
What is the minimum balance in SBI FCRA account?
There is no minimum balance requirement for the designated FCRA account at SBI.
Can we withdraw cash from FCRA account?
No, funds in the FCRA account are meant for specific purposes outlined in your FCRA registration. Withdrawing cash directly is generally not allowed. You can use these funds to make approved payments through bank transfers or cheques.
Does FCRA apply to deposit accounts?
FCRA specifically regulates the receipt and utilization of foreign contributions. It applies to any type of bank account used for this purpose, including deposit accounts.
Does FCRA apply to business accounts, checking accounts, or commercial accounts?
FCRA applies if the account is used to receive or manage foreign contributions received by an FCRA-registered entity. The type of account (business, checking, commercial) is less relevant than the purpose it serves for FCRA funds.
Does the FCRA apply to all credit bureaus?
No, FCRA is a regulation for foreign contributions, not credit reporting. It does not apply to credit bureaus.
When to use an FCRA bank account?
You should use an FCRA bank account only to receive and manage foreign contributions received after obtaining FCRA registration or prior permission. You cannot use it for regular domestic transactions.
