Intimation or Approval

Dear SRRF Dialogue Members,

I have one NGO in which they open sub-utilisation accounts for their various projects and intimate the same within time as prescribed in the Act & Rules.

My query is whether NGO can start utilising funds from such intimated accounts after intimation or need to wait for the approval of sub-utilisation account from MHA

Your swift response is awaited along with some cited information as NGO had one mail from MHA which says that NGO should wait for approval

Thanks & regards
CS Swati Singhal Arora
Senior Associate

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5 Responses to Intimation or Approval

  1. SWATI SINGHAL says:

    thanks all for your suggestions. I know there is nothing like taken any approval from department after intimation. I have write an email to support of FCRA and they said just go through the rules and regulations of MHA. So i m taking this as intimating sub-accounts within 15 days is enough to operate such bank account

  2. Subhash Mittal says:

    Yes, I agree with above views of learned SRRF Dialogue members. Rule 9(1)(e) which covers opening of utilisation accounts states …,in all such cases, intimation on plain paper shall be furnished …. within fifteen days of the opening of any account. This rule has been amended vide Amendment Rule 2015, and the word ‘on plain paper’ has been replaced by ‘electronically online in Form FC-6’.

    Thus the changes in rule does not amend the basic intention of Rule 9(1)(e) i.e. intimation within 15 days, only the process has to be undertaken in electronic form.

    Problem one faces is while using this electronic form of intimation, sometimes these updations do not get updated on the site. We have time and again seen that even after intimating to the Dept through FC-6 (not only bank accounts, but other details like Board members, etc.) changes often are not updated on the site. My suggestions wherever updation has not taken place on the site, send an e-mail, attaching the printout of the updation made in Form FC6 (if you wish to be very careful could even send this intimation to the Dept through speedpost- purpose being that at least you have evidence that you have intimated the Dept of the change).

    Dept now writing that you should wait for approval is not correct, since rules or even Act does not say anywhere that these need to be approved by the Dept. Word ‘intimation’ has been used at other places in Rules. Refer Rule 17, which covers of filing of annual return. The heading of the Rule itself states ‘Intimation of foreign contribution by the recipient’. Now no one waits for approval of Annual Return filed, it is simply intimation to the Dept of the information requested in Form FC-4. Dept cannot change the rule without following due process.

  3. B V Soma Sastry says:

    Dear Swati,

    As per the provisions of the FCRA 2010, a NGO can open utilization accounts and there is no restriction on the number of such accounts being opened. Also, note that prior approval of the MoHA is not needed for using the funds from the account. Intimation regarding the opening of such account should be informed to the MoHA within 15 days of opening such account/s.

    As of now all such intimation have to be made online.

    Thanks and regards,

    B V Soma Sastry

  4. L Sridhar says:

    Sub accounts to the main FCRA account can be opened and intimated to MHA. No prior permission required. the Year end return filed should carry the details of all the sub accounts. Please take care that only transfers are received from Main FCRA account and the sub account does not receive any local contributions or credits into it.

  5. CA, Satish Joshi says:

    A FCRA recognised designated bank account is meant to ‘receive’ foreign fund. If fund from the designated bank account is redirected to other donor specific bank accounts (of same NGO) in line with the Grant stipulation to ensure disbursements as per respective budget line item there should not be any problem. Some NGO’s with multi-location operation also have bank accounts for local operation as well. The NGO should be in a position to produce grant wise fund / balance status on a given date.

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