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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Contribution Regulation

Sahyog Trust, an NGO holding an FCRA certificate, receives foreign donations. Under the Act, which account must it use to first receive the foreign contribution?

The NGO must receive foreign contribution only in an FCRA Account opened in the specified State Bank of India branch at New Delhi. Other scheduled bank accounts may be used only for keeping or utilising funds that have already been received through that designated account.

  1. AAn FCRA Account designated by the bank, opened in the specified State Bank of India branch at New DelhiCorrect
  2. BAny current account in a scheduled bank of its choice
  3. CIts general savings account, as long as the donor is informed
  4. DA fixed deposit account in a cooperative bank

Explanation

Section 17(1) requires a certificate holder to receive foreign contribution only in an account designated as 'FCRA Account' opened in the specified SBI branch at New Delhi. Receiving it in any ordinary scheduled bank account is wrong, because a scheduled bank account is allowed only for keeping or utilising money already received through that account.

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