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CS Professional · CSR and Social Governance · Foreign Funding to Non-Corporate Entities

Asha Seva Samiti holds a certificate under section 12 of the FCRA, 2010. Its treasurer proposes to receive a foreign donation into the samiti's existing local current account at a scheduled bank in Jaipur, and also to deposit the samiti's domestic membership fees into its FCRA Account. Which statement is correct under section 17?

A certificate holder must receive foreign contribution only in an FCRA Account at the specified State Bank of India branch in New Delhi, and no other funds may be deposited in such an account. Both proposals by the treasurer therefore violate section 17.

  1. ABoth steps are permitted since the bank is a scheduled bank
  2. BForeign contribution must be received in an FCRA Account at the specified State Bank of India branch at New Delhi, and no funds other than foreign contribution may be deposited in such an accountCorrect
  3. CForeign contribution may be received in any account, but domestic funds cannot be mixed in utilisation accounts
  4. DOnly domestic funds may be deposited in the FCRA Account, not foreign contribution

Explanation

Section 17(1) requires a certificate holder to receive foreign contribution only in an account designated as FCRA Account at the specified State Bank of India branch at New Delhi. The last proviso bars receiving or depositing funds other than foreign contribution in such accounts. Both proposed steps therefore breach section 17.

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