Can balance funds of project be returned to foreign source from fcra by bank transfer

Posted on September 13, 2014 by SRRF

Dear Friends,

Can balance funds of project be returned to foreign source from fcra bank account via wire transfer.

Kindly advise.

Thanks,
Regards,
Arvind Balamkar
Finance Associate
for TeachForIndia

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4 Responses to Can balance funds of project be returned to foreign source from fcra by bank transfer

  1. Subhash Mittal says:
    September 16, 2014 at 4:55 pm

    Dear Freinds,

    There is no legal provision in FCRA Act which prohibits return of FCRA funds back to donor. Infact in past I have seen a number of cases, where funds have been returned, since the project for which funds were sent was no longer relevant for the donor. All that one had to do was obtain RBI permission, who had no problem in granting this permission. However lately we found at least one case where FCRA Dept has refused permission to transfer money back. I believe there is no legal basis for the same, since purpose of FCRA is only to monitor proper utilisation of foreign contribution in India and not to interfere in normal transactions between a donor and donee.

  2. C Udayashankar says:
    September 16, 2014 at 10:26 am

    Such issues are generally covered right in the MOU signed.
    One can seek extension of the project, not just to utilize the unspent amount but to b3 spent on empowerment of the target group.

  3. Jiwan Prakash Saha says:
    September 16, 2014 at 9:27 am

    Dear Arvind,

    You have posed a very relevant question and to deal with such situation is very crucial from FCRA perspective but its a very practical one.

    The approach should be to discuss with the donor agency about criticality with FCRA rules and following options should be sought :

    1) Transfer the left out funds to other NGOs who are sub grantee of the same donor ( with proper documentation)
    2) Seeking permission to utilize the unspent funds for similar activities of other donor.
    3) Seeking no cost extension.

    I can see the above options which are less painful rather transferring funds from FCRA bank accounts to foreign based donor’s bank account.

    Regards,
    Jiwan

  4. B V Soma Sastry says:
    September 16, 2014 at 8:37 am

    Dear Arvind,

    Greetings from Hyderabad!

    Technically we cannot transfer the balance project funds to donors outside India. This will amount to transfer of funds from FC to NFC as the FCRA is not applicable outside India. Also, I am not sure as to what you mean by wire transfer. But in so far as the transfer of FC funds is concerned, other than banking route is not permissible.

    Thanks and regards,

    B V Soma Sastry

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