Under the Foreign Contribution (Regulation) Amendment Act of 2020, organizations registered under the FCRA are required to maintain a dedicated FCRA account at the State Bank of India’s Main Branch located in New Delhi for the purpose of receiving foreign contributions.
This designated account is solely for receiving online foreign funds. Additionally, organizations may open a second account with any scheduled bank for utilizing these foreign contributions, which acts as the functional designated account for fund usage.
Details of the designated account must be provided in the FCRA registration application or in any application for prior permission. The account number will be included in the approval letter received by the organization.
Process of Opening an FCRA Account
- Step 1: The applicant must obtain the Account Opening Form (AOF) either in person at the nearest SBI branch, a branch of their choice, or by downloading it from the SBI website.
- Step 2: The completed form must be submitted for review and verification, along with the necessary KYC documentation, which should include the KYCs of the signatories and the controlling person/beneficial owner.
- Step 3: The applicant must send the completed form via mail and also provide a hard copy of the AOF to open the ‘FCRA Account’ at NDMB.
- Step 4: The branch that accepted the AOF will send an acknowledgment to the applicant.
- Step 5: After reviewing the AOF and KYC documents, the SBI branch accepting the AOF will email the verified documents to SBI, NDMB. This process may take up to three working days.
- Step 6: SBI, NDMB will confirm receipt of the AOF and other documents to the applicant via email within one working day of receiving them.
- Step 7: Within three working days of receiving the duly verified scanned copies of the complete AOF and KYC documents from the receiving branch, NDMB will notify the applicant entity of the details of the newly opened ‘FCRA Account’.
- Step 8: Notifications will be dispatched via SMS and to the registered email address.
- Step 9: The applicant can continue to maintain their existing FCRA Accounts for keeping or utilizing funds.
Designated Banks for FCRA Accounts
According to Section 17 of the Foreign Contribution Regulation Act, 2010, foreign contributions must be received solely in a designated, exclusive FC account at a specified bank, as outlined in the FCRA registration or FCRA prior permission order. This account should be maintained separately by the association. It is illegal to accept donations in any account other than the designated FCRA Bank account. Funds in this account can be used directly without limitations.
The State Bank of India, New Delhi Main Branch, Sansad Marg, Delhi-110001, was designated as the branch for opening FCRA-designated bank accounts by the Ministry of Home Affairs on 7 October 2020.
Advantages of Opening an FCRA Account in SBI
Transparency
FCRA bank accounts ensure that foreign contributions received by NGOs and other organizations are handled transparently and in compliance with legal regulations.
Compliance with FCRA Amendment Act, 2020
The FCRA Amendment Act, 2020 implemented stricter regulations on the management of foreign contributions. A notable change is that FCRA bank accounts can only be established at the State Bank of India’s main office in New Delhi.
Competitive Interest Rates
The State Bank of India (SBI) is a preferred bank for non-resident Indians (NRIs) looking to invest their earnings in India, as it offers competitive interest rates on NRI deposits. These favorable rates provide a safe and reliable banking option while helping NRIs maximize their savings returns.