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

Lakshmi Foundation is registered under the FCRA and receives foreign contribution in its designated FCRA Account at the specified State Bank of India branch in New Delhi. It now moves part of the money into a second account of its own in a scheduled bank of its choice, only to use the funds for its project. Is this move covered by the prohibition in Section 7?

No, it is not caught by Section 7. Section 17 allows the holder of the certificate to open one or more accounts in scheduled banks and move foreign contribution into them for utilisation. This is a movement between the holder's own accounts, not a transfer to another person.

  1. AYes, any movement of foreign contribution out of the New Delhi account is a transfer to another person
  2. BYes, unless the Central Government approves each such movement
  3. CNo, because the Act itself allows the person to open further accounts in scheduled banks to which it may transfer the funds for utilisationCorrect
  4. DNo, because transfers between a person's own bank accounts are allowed only if the amount is below Rs 10 lakh

Explanation

Section 17(1), second proviso, lets the certificate holder open one or more accounts in scheduled banks to which it may transfer foreign contribution for utilisation. The movement is within the same person's own accounts, so it is not a transfer to any other person under Section 7. No monetary limit or approval is stated in the text.

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