Query – FCRA Bank Account

Respected Sir,

I draw your kind attention towards query we have faced regarding FCRA Project Account.As per the new act organization should open a multiple account under main fcra designated bank account to utilise fc money for relevant project and within 15 days organization have to intimate MHA (FCRA devision) for opening a new bank account but we have not received any correspondence regarding this account from MHA. Now query We received Fc fund in our Main FC account and than transfer money to our project account. and from project account we transfer money to our partner who have FCRA registration and they have to show this money in their FC Designated bank account first and than they transfer that amount to their project account but one of our partner received complain from their bank that the amount receive in his account must be from Fc Designated bank account only. So there is any clause regarding this issue to solve the problem.


Bhavesh Soni
175, Jalaram Society,
B/h. Vishwamangal Appt.
Vijay Nagar,
Bhuj 370 001. Kutch

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3 Responses to Query – FCRA Bank Account

  1. Expert Panel says:


    We refer to the query raised by Bhuvnesh Soni of Sahjeevan about, if funds can be transferred to other FCRA registered entities from Utilization Accounts. One of the problem he is facing is that when he wants to transfer funds to other registered entities out of Utilization Account, the banker of the entity to whom funds are being transferred has raised objections that these funds are from local bank account and not from FCRA bank account.

    Opening of more than one bank account has been covered by S. 17 (1), particularly the first proviso, which states ‘that such person may open one or more accounts in one or more banks for utilizing the foreign contribution received by him’. There are no specific rules covering these provisions.

    While on the face of it there is no specific provision, if funds can be transferred to other registered entities (covered under Rule 24(2)) out of utilization accounts. However if one reads the S.17(1) first proviso carefully, it states that the account can be opened ‘for utilizing the foreign contribution receive by him’. Since transfer of funds to other agencies cannot be treated as utilization, this is likely to be shown as Utilization in the FC6 of the registered agency to whose account funds are further transferred, therefore one interpretation would be that transfer of funds should be only from designated bank account.

    In any case, rather than making the issue a legal one, it would be better to solve it at a practical level. Hence it is suggested that funds to be transferred to other entities for further utilization, should be done through the designated FCRA bank account.
    Socio Research & Reform Foundation
    (A Non Government Organisation)
    512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
    e-mail: socio-research@sma.net.in

  2. N.M.Valan says:

    From new FCRA law I understand that ,Opening of new account for those who are implementing the projects, From this account you can’t trf the money to other FCRA account holder.

    If you are funding partner you can trf the money to your partner from the main FCRA account.

    Money can trf one FCRA account to another FCRA account only from the main FCRA account.

    Multiple account open only for utilization purpose only.

  3. B V Soma Sastry says:

    Dear All,

    Greetings from Hyderabad!

    1. The NPO is expected to inform the MoHA on the opening of utilization account within 15 days of its opening. As has been the case, for such cases where only information is provided to MoHA, most of the organizations do not receive any communication from MoHA. Also, NPO are only expected to inform MoHA. Therefore to be on safe side, NPOs should retain the copy of the letter and the postal acknowledgement as a proof of having submitted the information.
    2. The money is received in the main FC account and then transferred to the project utilization account. But for better control over the usage of funds it is advisable to transfer funds from the designated FC bank account to the designated bank account of partner. While the funds are transferred from one organization to another, also the MoU is signed between the two organizations, it is better that funds are transferred from the main account. This will also ensure that the authorized signatories also are in knowhow of the funds and its utilization. This is under the assumption that the signatories to the utilization account are different from the main account.
    3. The funds for the day to day usage can be transferred to the utilization.
    4. There is no specific clause in FCRA 2010 which stops NPOs from transferring funds from utilization account. Also there is no clause that talks specifically of the issue raised by the bank. NPOs should adopt an approach that is better for the internal controls and governance mechanisms of the organization.

    Thanks and regards,
    B V Soma Sastry
    Director – Finance and Admin
    Centre for World Solidarity
    12-13-438, Street No. 1, Tarnaka
    Secunderabad 500 017
    Andhra Pradesh

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