Implication on transferring of FCRA Fund to utilisation bank account

Posted on February 25, 2017 by SRRF

Dear Group Members,

Greetings!

Can we transfer FCRA fund from one FCRA bank account to another FCRA bank account?

By mistake, donor sent the fund to an NGO. The fund is now in FCRA bank account of the NGO. This NGO is ready to transfer the fund to the NGO to whom the fund belongs to.

We are in touch with some auditors. Some auditors are saying, fund can be transferred from one FC bank account to another FC bank account. Some auditors are saying it can not be. Prior permission is required from Home Ministry.

Please advice.

Thanks & regards,

Ajaya Paik

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3 Responses to Implication on transferring of FCRA Fund to utilisation bank account

  1. B V Soma Sastry says:
    March 4, 2017 at 10:35 am

    Dear Ajaya,

    It has been a long time that we heard from you. Please note that money from one FC account to another FC account can be transferred. The necessary documents can be obtained from the donor before the amount is transferred from one NGO to another.

    Also, the NGO transferring funds can treat this as utilization in their books.

    Thanks and regards,

    B V Soma Sastry

  2. Ritesh Koshik says:
    March 1, 2017 at 7:05 am

    Requirement of taking prior permission is a very conservative view. The other possible solutions could be;
    1. Returning the money to originator & let the funder send the amount to the correct recipient. Document this as a mistake with FCRA.
    2. Documenting the mistake in transfer with funder & seeking their mandate to transfer it to the right recipient. Documenting the transaction as such.

    Personally I would prefer route 1

  3. L Sridhar says:
    February 28, 2017 at 9:15 am

    Transfer from on FC account to another is in principle OK. The funds received in an FC account can be applied only for permitted purposes, of the concerned entity. Contributing to another entity with FC is ok only when the other entity has similar objects as approved. There is an onerous obligation of the FC unit to prove that they have applied the funds only for the limited purposes for which it was mobilised, based on the objects. Free transfer from one FC to another is asking for trouble. Transfer of FC to another, should be done after obtaining a copy of the other entity’s FCRA registration certificate, together with representation from them, that they would apply the funds for specified purposes and render account for the same. Obligation under the FCRA law is not washed off by transfer to another FC account.

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