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

Lakshya Foundation, a registered NGO, receives foreign contribution in its FCRA Account at the designated State Bank of India branch, New Delhi. Its finance head wants to move the money to a scheduled bank near its Jaipur office and also deposit local donations of ₹2 lakh into that same utilisation account for convenience. Which statement is correct under the Act?

The NGO may open another FCRA Account in a scheduled bank of its choice to utilise the money received in the New Delhi SBI account. However, no funds other than foreign contribution may be received or deposited in any such account, so local donations cannot be mixed in.

  1. AIt may open another FCRA Account in a scheduled bank of its choice for utilising the money, but no funds other than foreign contribution may be deposited in itCorrect
  2. BIt may deposit local donations in the utilisation account, as long as they are separately recorded in the books
  3. CIt must keep all foreign contribution only in the New Delhi SBI account and cannot open any other account
  4. DIt may open a utilisation account in any scheduled bank only after the Central Government approves each transfer

Explanation

Section 17 allows a further FCRA Account, or accounts, in scheduled banks of the person's choice for keeping or utilising foreign contribution received from the New Delhi account. The last proviso bars receiving or depositing any funds other than foreign contribution in such accounts. Hence mixing local donations is wrong, and separate bookkeeping does not cure it.

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