MHA has come out with a clarification through a Public Notice dt 21-1-2025, that once a FCRA registration is suspended or cancelled, they cannot use FCRA funds lying either in Designated Bank account or Utilization bank Accounts. While in case of suspension / cancellation, FCRA authorities intimate SBI of the same, however no intimation goes to bankers who are maintaining Utilisation Accounts. Therefore, such bankers are not aware of the of suspension / cancellation of FCRA registration. At times, NPOs continue to use funds lying in these Utilisation bank accounts, even after FCRA has been suspended or cancelled. FCRA Dept has now clarified that such use is violative of FCRA provisions, and concerned NPOs could face penal action for the same.
The Dept has also clarified that any NPO, which fails to apply for renewal before expiry of registration, their FCRA registration falls under the category of Deem to be Ceased. Such NPOs cannot use FCRA funds lying in designated / utilization bank accounts after the registration has deemed to cease. Such NPOs who use fund after this date, are violating FCRA provisions, and could face penal actions.
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