Integrated Application for Registration, Prior Permission and Renewal
- One integrated form prepared for FCRA registration, Prior permission and Renewal. Till now one had to use different forms for each of these activities, FC3 for registration, FC4 for prior permission and FC5 for renewal, now an integrated form FC3 has been drafted.
- Now printed copy of form not to be submitted, instead applications need to be Digitally Signed just like as in Income Tax and Companies Act. All documents required to be submitted in hard copies would now be scanned and submitted alongwith these applications.
- Fee would need to be paid online through electronic gateway.
Declaration on web-site
- All NGOs granted registration / prior permission would need to post Audited FCRA Accounts would need to be posted on their websites.
- Any foreign contribution received would need to be displayed within 7 days of receipt on website.
Annual Return
- From now on even annual return (FC6 till now) will no longer need to be filed in printed copy and only Digitally Signed copy would need to be filed alongwith all supporting documents. Time limit still remains of 31st
Requirements from Bankers
- All bankers have to inform within 48 hours Central Govt. about receipt of any foreign contribution by any ‘person’ who receives such contribution but till date does not have registration / prior permission. In previous rules this was 30 days.
- Bankers are also required to inform within 48 hours the central govt. all remittances received by FCRA registered or having prior permission in their designated or utilization bank accounts.
Changes in Forms
- Earlier there were 10 forms (FC1-FC10), these have now been reduced to 7 (FC1-FC7). As mentioned above Form for Registration (FC3), Form for Prior Permission (FC4) and Form for Renewal (FC5) all have been merged in a new form FC3. Also earlier forms for articles (FC7) and securities (FC8) have been merged into one form FC5. Consequentially all other forms have been renumbered in sequential order.
Changes in these forms are highlighted as below:
FC1 (new Form No. FC1): Intimation of receipt of FC by way of gift from relative.
- No change except details like e-mail, mobile nu., address etc. now sought.
- Still to be submitted in a printed copy.
- Normally to be submitted by an individual.
FC2 (new Form No. FC2): Prior permission for receiving hospitality
- Normally to be submitted by persons covered under S. 3, (legislature, Govt employees, judges, etc.) who are likely to visit abroad and accept foreign hospitality
- Certain changes made in the form but seem more a case of drafting error, as details of organisation, which will provide hospitality seem to have been left out.
FC3 – earlier only covered registration (new Form now covers registration / prior permission / renewal)
- Very strange now the form requires details of facebook page and twitter handle of the chief functionary
- Now alongwith details of Chief Functionary and executive members/ office bearers, details of Chief Patron are also requested.
- In case any of the persons whose details have been provided is a foreign citizen, following additional details are requested:
- Place of Birth
- Passport No.
- Permanent address in foreign country
- If a person of Indian origin, then details of OIC/PIO card,
- If resident in India, from when,
- In case of above persons details of any positions held in any other NGO
- Details also asked for organisations which have been granted prior permission / registration and are a unit / branch / associate of the organisation applying.
- Has been prohibited under S. 10 or asked to obtain prior permission under S. 9(d).
- Details of designated / utilization accounts being asked.
- Q 13 asks for details of foreign sources both individuals as well as organisations from whom the foreign contribution is proposed to be received. Most likely this is applicable in case of prior permission where sources are known. However the Form does not mention that this information is not required in case of Registration cases.
FC4 – for annual return (earlier FC6)
- Prior permission return earlier used to go manually, now this will have to go online.
- Facebook page and twitter handle details of the chief functionary to be given here too.
- Total number of employees to be disclosed – This could pose problem as many NGOs are not registered for PF & ESI
- It is also asking donor wise details of foreign / local source. Rather perplexed, if a donor is a local source, then it should not appear in FCRA return in any case ?
- Now project details are also required along with address of implementation. Now amount has to be given address-wise.
- Details of administrative exps. asked for. Earlier no details were required.
- Branch office details to be provided
- Details of Designated as well as Utilisation Bank Accounts also required to be disclosed
- Details of closing balance not asked for.
- Now Chief Functionary has to declare that FC has not been used for (i) detrimental to national interest, (ii) not likely to affect prejudicially public interest, (iii) not likely to affect prejudicially security, strategic, scientific or economic interest of the State and any matters connected therewith or incidental thereto.
- Many changes in List of purposes to be discussed separately.
__________________________________
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008
The comprehension of the problems is gained after long experience on the topic.
I consider it proper that ” feasibility” and ” difficulties” experienced by the ” people working. At grass- root level”.should be taken
The people sending reactions will be as all fraction of. The total FCRAholders.
Sending reports of the budget received quarterly which should has been for some time in fine in my opinion and should not be tampered even after online system is operative; that is if banks are sending the information to MHZ directly ,automatically. My experience is SBI will never cooperate?! Unless MHA puts some penalty; Is. B it possible?
hence please send the draft of FCRA rules to educated NGO.s
Regards
Haribist
Sent from my iPad
Dear Mr Mittal,
The representation made for a review of certain sections is indeed necessary. Your formulation is also excellent. Hope that the the matter get due consideration and the new regulations are more conducive to our functioning.
Best wishes and regards,
Joe D’Souza
Thanks for sharing the memorandum submitted to MHA. It is well drafted and captures all valid concerns of grass root organizations working in countryside across our nation. Authorities have legitimate concerns of foreign funding being utilized for detrimental activities like terrorism / religious conversions / mere propaganda advancement / NGOs acting on behest of ulterior motives of multinational corporates. Having said this , it is also true that many of FCRA registered organizations are attempting a visible change in the community through multi faceted service projects. All our acts and regulations should ensure a conducive level playing environment for these catalysts.
Regards
Sudeep Goyal
ASHA KA JHARNA
Dear Dialogue Members,
Greetings from SRRF!!!
We have submitted our suggestions to FCRA department on the basis of inputs received on draft Foreign Contribution (Regulation) Amendment Rules, 2015. Please visit the following link to access the same:
http://www.srr-foundation.org/circulars/FCRA_representation_June-2015.pdf
Thanks to the all participants for prompt comments.
Regards
Ramanuj Maurya
Coordinator
__________________________________
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in; website: http://www.srr-foundation.org
Implication of the Proposed New Foreign Contribution (Regulation) Amendment Rules 2015.
The Ministry of Home Affairs (MHA) vide Circular dated 17th June 2015 has invited suggestions on proposed draft amendments to the Foreign Contribution (Regulation) Rules (FCRR) 2011. MHA proposes to replace the existing FCRR 2011 with a new Foreign Contribution (Regulation) Amendment Rules 2015.
According to this circular certain provisions of the existing Rules are sought to be amended “in order to improve the existing system of receipt of requests for registration, prior permission and renewal, faster processing; mandatorily seeking and maintaining the records of receipt and utilization of foreign contribution electronically, bringing transparency in receipt and utilization and reporting mechanism by banks using information technology in the best possible manner.”
Let’s look at some of the key proposed changes:
1) MHA has sought to integrate application for ‘Registration’, ‘Prior Permission’ & ‘Renewal’ all in one new integrated Form FC3.
Currently the form for seeking Registration under FCRA is Form FC 3, for seeking Prior Permission to receive foreign contribution is FC 4 and for seeking renewal of registration is FC 5.
On the face of it this seems good and streamlined. However, does it make sense bringing in this new form at a time when about 25,000 NGOs are expected to apply for renewal of FCRA registration? Several NGOs in a state of panic have already applied (off line) for renewal in Form FC 5 which was expected to go live on the MHA’s website in April this year!
Also, currently, after applying online NGOs are required to post hard copies to MHA which will be discontinued. However, the proposed new rules require all applications be it registration, prior permission or renewal to be digitally signed. Supporting documents that need to go with the application can be sent as scanned copies.
Processing Fees would also have to be paid online.
NGOs which are registered as Section 8 (old Section 25) Companies are familiar with this process and procedure. But, this could prove challenging for grassroots NGOs which are not quite tech savvy or struggling with internet connectivity in remote districts and villages.
With regard to the proposed new Form FC3 the MHA will now require additional disclosure of information with regard to:
2) All NGOs granted registration / prior permission will be required to post Audited FCRA Accounts on their website. Also, every foreign contribution received by the NGO would have to be displayed within 7 days of receipt on the NGOs website. MHA does not seem to be aware that there are still several NGOs in India which do not have a website.
3) With regard to Annual Returns the current Form FC 6 will be replaced by a new Form FC 4. Requirement to post hard copy will be discontinued and instead Digitally Signed return along with scanned copies of supporting documents will have to be submitted. The last date of filing returns continues to remain 31st December.
The proposed new Form FC 4 requires the following new details:
We see nothing wrong with the concept of filing online returns. However, MHA’s website has several technical glitches which have disabled NGOs from filing online returns, even when they want to. There are hundreds of NGOs which tell us that they have either lost or forgotten their password or at times even the right login password does not work. Many have written to MHA for resolving this problem but to no avail.
MHA says more than 50% NGOs registered under FCRA do not file returns and of course the media gleefully picks that up as sensational news. The fact is almost 50% of NGOs registered under FCRA now no longer require FCRA and there is no process or procedure under FCRA for an NGO to voluntarily surrender its registration.
4) All banks will be required to inform MHA within 48 hours the receipt of any foreign contribution by any ‘person’ who receives such contribution without having registration / prior permission under FCRA. Under the existing Rules the given period is 30 days.
Banks are also required to inform MHA within 48 hours all remittances received by organisations having FCRA registration or prior permission to receive foreign contributions.
MHA has not factored in online donations that hundreds of NGOs receive through the internet. Changes will have to be made on payment gateways to get details of foreign donors including their passport details which often foreign donors are reluctant to provide.
Noshir H. Dadrawala
CEO – CAP
Thank you all for providing your comments, as we need to submit the comments by 1st July, we will wait for your comments and consider all before finally submitting comments to MoH. Perhaps some of you could submit these comments directly to email id: ak.dhyani@nic.in.
While I agree that in principle, if the amendment improves the compliance it is always better. But we need to be also realistic, many of the NGOs in hinterland (as I am regularly travelling to such areas for assessing NGOs), I find many of them and sometimes even their CAs do not have any idea of the compliance. Though Dept. cannot be faulted in such cases, however dept. levying huge penalties for non-compliance for condonation is not right.
Coming to the amendments, yes their are some confusions in requirements where it is not clear how when one is applying for Registration one would know the name and address of the donors. That should be applicable only in case of Prior Permission.
Secondly asking office bearers facebook pages & twitter handles is a retrograde step. It seems that the Dept. is now wanting to know of individual office bearers political views while applying for registration / prior permission. This has dark overtones of Orwellian era. Otherwise why you need such information. For contacting an individual all one needs is their e-mail ids. This must be opposed in a free society.
warm rgds
Instead of feeling threatened and vulnerable, will it be good if we look inwards and build our strengths. Let us agree to what all of know that things are not rosy in our sector. On average, we have fallen down from our moral high. We need to pick same guts and wits when Funding Agencies exploit US. We need foreign and all funds but ‘depending upon foreign funds’ is not to our good health. We have no built in mechanism or unity to correct ourselves without punishment. We also need to go back grass roots. Many of us have migrated to capitals and urban centres.
There is no mechanism to enhance equity in funding. Many of our agendas are funding driven that gives wrong signals. We change our agenda and area of work depending upon the change in the priorities of Funding Agencies. We give an impression of loosing our identity of voicing the concerns of people.
Above all, we need to rejuvenate Volunteerism. But, we as NGOs look like new form of corporate with imperial controls. AND WE NEED TO BUILD UNITY AROUND THE GEOPOLITICAL IDENTITIES OF THE COMMUNITIES. With these measures we will be able to play the game of “hit out or get out”- Break our back but we shall not bend.
V.B.Chandrasekaran, Chatti Mahatma Gandhi Aashramam,
Chatti Post, Chinthur Mandal, East Godavari District,
Andhra Pradesh, Pin Code: 507129.
Email: verivaan2049@yahoo.com antarbharatid2010@gmail.com;
Mobile: +919490109328 +918297976970.
I fully endorse the views of Mr. Soma Sastry on this subject. I have also sent some suggestions to the FCRA wing to consider before finalising the proposed amendments. Some of those points are:-
In the notification, under point 7, which refers to FCRR Column 13, in 13(b), along with “within 7 days of receipt” the words “/crediting in the FCRA account” could also be included because the receipt will be conclusive only after it is credited in the FCRA account of the association. This point further mentions that all NGOs have to report the account details in their websites. Some of the smaller NGOs do not maintain websites. Will the Govt specify a particular website for them to post their accounts? Will they have to post even if their return is nil? These points may please be taken into consideration and suitable words may be included in the amendment.
In page 13 note, it is mentioned that the renewal applicant need not fill columns 9 to 14 of FC-3 form. It is felt that column 9 (a) & (b) could be retained for renewal applicants also and they may exempted from filling columns 10 to 14.
In page 15, in the Declaration and Undertaking in FC-3, the point (j) (ii) mentions about intimation of change of members for approval by the Ministry. In that, after the words, “if at any point of time,” the words “at one go” can be added, as there is always a confusion whether the Ministry’s direction on change of 50% or more of members relate to change of more than 50% members during the entire period of existence of the association, or sudden change of more than 50% members at one stroke, on one occasion, which case is definitely suspicious. After this, one more sub-clause(iii) could be added, mentioning, “intimating within 30 days, even in the case of change of one member of the Executive Committee, Governing Council, Office Bearers, mentioning the reason for the same”.
Further general comments I would like to make on the various amendments planned to be brought are:-
1) Already some smaller NGOs are finding it difficult to scan all the documents in PDF format and upload while filing FC-6 return. Now they have to remit the fee also through payment gateways. It is better the Govt authorizes good number of reputed agencies throughout the country for this purpose to help the NGOs in properly filing their returns/applications.
2) Some NGOs who did not file their return for 2013-14 online but sent the hard copy to the Ministry (having proof for the same) find that their names are not in the list of FCRA return filed organisations available in the FCRA website. Though they now get new ID and password for filing the return for 2014-15 electronically by making a special application, with the same ID and password, they are unable to file their online return for 2013-14 now. Some arrangement may please be made for them to file their previous return online, by scanning and including the proof of sending by post last year, for your verification and approval. Thereafter, those NGOs names could also be included in the published list. In some cases, the applications for new ID and password have not been responded. Please see that they get quick response if all the required documents are enclosed with the application.
3) If the digitalisation of the Renewal application has to be implemented, it should be enforced after October 31, 2015, the last date for filing of renewal application for those who possess FCRA registration prior to 1st May 2011. Because many of them have already filed their renewal application through hard copy along with draft etc. and it will not be proper to make all of them to file the application once again online. This will create unnecessary confusion.
4) Those who have already filed their renewal application have not got any acknowledgement from the FCRA wing regarding the receipt of their applications and they are worried because of that. An e-mail confirming the receipt and the probable date before which they would get the renewal order will be highly appreciated. I fully understand the manpower shortage in the wing, but something has to be done in this regard.
5) The words ‘multi-year funding’ has also created lot of confusion among the NGOs and so many of them with very little fund receipt have also filed their renewal application before April 30, 2015, one year before the expiry date of their registration. I think this specification creating confusion could be removed and there could be a general rule of submitting renewal application 6 months before the date of expiry of registration.
6) In practice, we find many of the bank officials are unaware of the FCRA rules and we are in doubt whether they are reporting about the foreign fund receipts in time, even now. So, if they are asked to report about any receipt or utilization of foreign funds, within 48 hours, it may be practically impossible for them in their busy schedule of work. It will be better if they are given at least a week’s time. (Or the details could be got by the Ministry through the Public Finance Management Scheme followed by the RBI).
7) Now, since all the NGOs have to go for digital signature certificates, the Ministry of Corporate Affairs may be asked to authorise more number of reputed agencies throughout the length and breadth of the country, to facilitate easy availability of the DSC.
8) It may be clarified publicly, whether FC-1 has to be submitted by any individual receiving Rs.1 lakh or more from their relative abroad, or it is applicable only to those persons prohibited under FCRA rules to receive foreign funds without permission.
9) In FC-3, lot of details have been asked about the donor. I doubt whether it is possible for the applying organisations to get all the required details.
10) The Ministry could announce certain time limits for clearing the applications seeking approval for change of address, name, objects, bank account, office bearers etc. as a way of better transparency and working order from the ministry side. This will also prohibit any corrupt practices and false promises given to gullible NGOs by some self styled facilitators.
Dear All,
I do not see this as any major control mechanism from MoHA. The only point that NPOs have to be careful is about putting up the receipt of FC funds withing 7 days on website. Many of the NPOs do not have websites or may not have sufficient funds to manage a website.
For the bankers, it will be a difficult exercise as they have to inform the Govt within 48 hours. The only problem I see here is that the bankers may block the credit to the NPOs to seek any details of the remittance. This kind of problems were faced when bank were expected to inform the Govt of remittance exceeding Rs. 1 cr.
It is also not the case of some bad apples. Atleast 50% of the registered FCRA NPOs are not filing the annual returns for whatever reason though the very second para in the registration certificate wants the NPOs to submit nil returns even if no funds are received.
As a sector if we are able to put our house in order, then we have the moral right to question the FDI etc that the Govt permits which to me is an equivalent of FC funds to corporate sector. Having said this, I firmly believe that law should apply equally to all without any bias or prejudice.
Thanks and regards,
B V Soma Sastry
1 Better if FCRA section asks for separate LC statements also from all FC and prior permission societies/trusts.
2. In the light of the draft – changes, can Agencies have a common CEO for both the not for profit Agency and related but separately registered not for profit company, of-course with separate Boards? Such an arrangement probably helps in achieving financial sustainability of voluntary services. Earnings of not for profit company are ploughed into voluntary services and related Admin-expenses of the not for profit Agency.
3 Our Country needs FDI. Why are they so touchy about FDI through not for profits who created up-scaled models and contributed a lot to growth and employment in a cost and time effective manner? Foreign money brought in by NGOs should be considered as FDI.
4 Why can’t they privatize rural development in favor of not for profit Agencies, companies and SHGs and their federations, registered and duly recognized by Panchayths ? SHGs can seek services from not for profit Agencies / Companies.
Udayashankar
Very informative and useful information.
Personally speaking, I see this attempt to control funding sources to NGOs going from bad to worse. It would be a different thing if there were a robust domestic philanthropy sector, and a number of Indian donor organizations interested in exploring various aspects of civil society action. But there isn’t; and there is significant work being done in a variety of sectors with foreign funding.
Is there a risk that there as some bad apples? Of course there is. But if for-profit companies are allowed to bring in foreign funds without any accountability whatsoever – and there is any never any associated misgiving regarding the usage of the funds, whether it is in the national interest, etc. – then why should one subject only the CSOs to such suspicion and regulation? Either it should apply equally to both, or to none.
More importantly, as an op-ed piece recently noted, if it okay for for-profit entities to bring in foreign funds in order to do their work, and which may often impact the lives, livelihoods and prospects of grassroots communities in many detrimental ways, why is it not okay to similarly accept other foreign funds to combat these destructive effects? It’s okay to import funds in the name of infrastructure development, but not okay to receive them in the name of campaigning for equitable development, social justice and eco-consciousness?
The procedures outlined above constitute a very intrusive and arrogant interference in the life of an organization: I am all for transparency, and for CSOs to be open about their incomes, utilization and usage of funds. I am equally for the idea of accountability from the NGO sector, where all too often development money is spent with little on-ground impact. But I am way of someone looking over my shoulder all the time as if we were not professionals with skills, ability and capacity.
The only irony is that a variety of political entities seem to be united in developing ever more draconian processes to harass organizations that are genuinely well respected in the sector, and who take their work very seriously.
Dear Ramakrishnan, the genuinely well respected and those working seriously “with communities” this should be an interesting game instead of threat.
Regards,
V.B.Chandrasekaran