Missionaries of Charity denied FCRA Nod

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• The Union Home Ministry (MHA) said that it has refused to renew the FCRA registration of Missionaries of Charity, a Catholic religious congregation set up by Nobel laureate Mother Teresa, as “some adverse inputs were noticed.”

What is the FCRA?

• Regulate foreign donations: It is a slew of new measures to regulate foreign donations.
  • The Act, first enacted in 1976 was amended in the year 2010 and then 2020.
• Application: The FCRA is applicable to all associations, groups and NGOs which intend to receive foreign donations.
  • It is mandatory for all such NGOs to register themselves under the FCRA.
• Validity: The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.
• Purpose: Registered associations can receive foreign contribution for social, educational, religious, economic and cultural purposes.
• Mandatory IT filing: Filing of annual returns, on the lines of Income Tax, is compulsory.
• Internal security: The FCRA regulates foreign donations and ensures that such contributions do not adversely affect internal security.

New guidelines to banks on Foreign Contribution (Regulation) Act rules

• State Bank of India’s New Delhi branch: A new provision that makes it mandatory for all NGOs to receive foreign funds in a designated bank account at the State Bank of India’s New Delhi branch was inserted.
• Designated FCRA account: All NGOs seeking foreign donations have to open a designated FCRA account at the SBI branch.
  • The NGOs can retain their existing FCRA account in any other bank but it will have to be mandatorily linked to the SBI branch in New Delhi.
• Only banking channels allowed: Foreign contribution has to be received only through banking channels and it has to be accounted for in the manner prescribed.
• OCI or PIO: Donations given in Indian rupees by any foreign source including foreigners of Indian origin like OCI or PIO cardholders” should also be treated as foreign contribution.
• Sovereignty and integrity: It requires NGOs to give an undertaking that the acceptance of foreign funds is not likely to prejudicially affect the sovereignty and integrity of India or impact friendly relations with any foreign state and does not disrupt communal harmony.

 Who cannot receive foreign donations?

• Prohibition: Members of the legislature and political parties, government officials, judges and media persons are prohibited from receiving any foreign contribution.
• Political parties: However, in 2017 the MHA, through the Finance Bill route, amended the 1976-repealed FCRA law paving the way for political parties to receive funds from the Indian subsidiary of a foreign company or a foreign company in which an Indian holds 50% or more shares.

 How else can one receive foreign funding?

• Prior permission: The other way to receive foreign contributions is by applying for prior permission.
  • A letter of commitment from the foreign donor specifying the amount and purpose is also required.
• Specific activities or projects: It is granted for receipt of a specific amount from a specific donor for carrying out specific activities or projects.
• Registration: But the association should be registered under statutes such as the Societies Registration Act, 1860, the Indian Trusts Act, 1882, or Section 25 of the Companies Act, 1956.

When is a registration suspended or canceled?

• The MHA: on inspection of accounts and on receiving any adverse input against the functioning of an association can suspend the FCRA registration initially for 180 days.
  • The MHA can cancel the registration of an organization which will not be eligible for registration or grant of ‘prior permission’ for three years from the date of cancellation.
• 25% of the amount available: Until a decision is taken, the association cannot receive any fresh donation and cannot utilize more than 25% of the amount available in the designated bank account without permission of the MHA.

Source: TH