FCRA 2010 Act has become effective 1st May 2011. Govt has notified the change. Copy of the notification is attached.
Govt. has made only some minor changes in the Rules, these are as follows:
Description of organisation of political nature but not being a political party
- Rule 3 (iii) has been amended by removing the words ‘comments’ on political activities. This was mentioned in our feedback to the Dept. Thus now at least commenting on political activities is not a ground for declaring an organisation to be of political nature.
- Rule 3 (v) has been amended by removing the words ‘socio-economic’ interests from the definition.
- Rule 3 (vi) amended with word ‘etc’ removed from the type of actions mentioned. While all other methods as originally mentioned in the rules have been retained. Thus only a small consolation that the officials would only go by specific actions specified in the rules only.
- Rule 4(b) amended to add ‘chits or similar assets’ in addition to land.
- Rule 7 (3) which earlier allowed a person to file application in urgent cases for prior permission even less than two weeks before the date of proposed journey, however now the final rule requires that application must be received at least two weeks before such date.
Further earlier this rule allowed the person to make the application within the said period, now it has been made it more clear by stating that the application should reach at least before two weeks.
- Rule 9 (1) (e) has been amended to clarify that FCRA registered or persons with Prior permission can open either one or more bank accounts in the same bank or in more than one bank.
Fee for application of registration / prior permission
- Central Govt. authorised to revise fee amount from time to time.
Maintenance of Accounts
- New Rule 11 added requiring maintenance of a separate set of accounts and records exclusively for the foreign contribution received and utilised. It was there in the 1976 Rules, however draft rules did not have the same.
Renewal of Registration Certificate
- A new category of persons has been defined for renewal of registration certificate. That is persons implementing multi-year projects would need to apply 12 months in advance before the expiry of the certificate. Organisations would need to decide if they are falling in this category or not. The rule seems to have been incorporated for allowing the department to have more time / spread to renew the applications which otherwise all of whom would apply just before 6 months of the project. However it is better, since the organisations would have more certainty and can advise their donors about the continuation of their FCRA status.
Custody of foreign contribution where certificate has been cancelled
- Draft Rule 14(3) which required funds to vest with District Magistrate wherever a persons ceases to exist or the certificate has been cancelled has been removed.
Preservation of records
- In a welcome development Rule 17(7) requires accounting statements to be preserved for six years. Although rule is not exactly specific since it talks of accounting statements referred to in the preceding sub-rule. Although the preceding sub-rule (6) only talks of bank-statement, however since the context of this rule is submission of financial statements (refer Rule 17(1)), perhaps it can be interpreted that only financial statements and supporting records is the context of the rule.
Transfer of funds to registered / unregistered persons
- Unfortunately this most unpractical clause has been retained in the final rules. Further in case of unregistered bodies, now while the organisation transferring the funds can apply on their behalf, however but the application needs to be countersigned by the DM of the area in which funds are to be utilised. Though it is specified that the DM would take decision within 60 days, no clarity is there what would happen if such decision is not forthcoming within the said period. It seems the whole purpose of this clause (facilitating small and remote organisations receiving foreign contribution) has been defeated.
Form FC-4 : Application for Prior Permission
Earlier this form required that prior permission would be obtained if there was more than 50% change in the Executive Committee. Now only an intimation is to be sent within 30 days of such a change.
While we will not like to claim credit for any changes (in fact changes are few and far and we are rather disappointed that many of the changes suggested have not been effective) however we would particularly like to mention that couple of changes (Time limit for records and commenting on political activities) that Mr Kosala had mentioned were sent by us through e-mail and these have been put in effect, so thanks to him.
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
Tele/Fax: +91-11-25821088, 25817157, 25722044