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

Seva Trust, registered under the FCRA, 2010, receives foreign contribution in its designated account. The trustee proposes to deposit the proceeds of a local flower sale into the same FCRA account for convenience. Under section 17, what is the position?

It is not permitted. Section 17 provides that no funds other than foreign contribution shall be received or deposited in any FCRA account. This holds for both the State Bank of India New Delhi account and any other FCRA account in a scheduled bank, whatever the amount.

  1. APermitted, if the amount is below the prescribed limit
  2. BPermitted, provided the bank is informed in writing
  3. CNot permitted, because no funds other than foreign contribution may be received or deposited in such an accountCorrect
  4. DPermitted only in the account opened in the scheduled bank of the trust's choice, not the State Bank of India branch

Explanation

The last proviso to section 17(1) says no funds other than foreign contribution shall be received or deposited in any such account. This applies to the SBI New Delhi FCRA account and to the further FCRA accounts alike, so the local sale proceeds cannot be deposited there.

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