FOREIGN CONTRIBUTION (REGULATION) ACT Syllabus GS Paper 2 - Governance)

Context: The Union Home Ministry extended the validity of the Foreign Contribution (Regulation) Act (FCRA) registration of non government organisations (NGOs) and associations till June 30.

Foreign Contribution (Regulation) Act (FCRA)

• About: Regulates the receiving and use of foreign contributions by individuals and corporations established in India. The Foreign Contribution (Regulation) Act, 2010 has come into effect from 2011.
• Objectives: The law sought to regulate foreign donations to individuals and associations so that they functioned “in a manner consistent with the values of a sovereign democratic republic.
• Extend to: It extends to the whole of India.
• Apply to:

oCitizens of India outside India.

oAssociate branches or subsidiaries, outside India, of companies or bodies corporate, registered or incorporated in India.

• Validity: Once granted, FCRA registration is valid for five years.
• Renewal: NGOs are expected to apply for renewal within six months of the date of expiry of registration.
• Expiry: In case of failure to apply for renewal, the registration is deemed to have expired, and the NGO is no longer entitled to receive foreign funds or utilise its existing funds without permission from the ministry.
• FCRA requires every person or NGO seeking to receive foreign donations:

oRegistered under the Act.

oTo open a bank account for the receipt of the foreign funds in State Bank of India, Delhi.