FCRA Current Affairs

MHA directs NGOs to open account in designated banks integrated with PMFS

The Union Ministry of Home Affairs (MHA) has directed all NGOs, individuals and business entities receiving foreign funds to open accounts in any of 32 designated banks, including one foreign, within a month. The MHA order comes in exercise of the powers conferred under Foreign Contribution (Regulation) Act (FCRA), 2010.


These accounts opened in 32 designated banks will be integrated with central government’s Public Financial Management System (PFMS). Its purpose is to provide higher level of transparency and hassle-free reporting compliance.


In recent times, Government has tightened rules for NGOs and had taken action against all such entities for violation of various provisions of FCRA 2010 which include non-filing of annual returns as mandated in law. Government had cancelled registrations of 18,868 NGOs between 2011 and 2017 for violating laws.

The FCRA 2010 provides for regulation of acceptance of foreign funds/foreign hospitality by certain individuals, associations, organisations and companies. It ensures that such contributions or hospitality is not being utilised for activities detrimental to the national interest. Currently, around 10,000 FCRA-registered NGOs are operating in country.

Public Financial Management System (PFMS)

The PFMS is an end-to-end solution for processing payments, tracking, monitoring, accounting, reconciliation and reporting. It functions under the Controller General of Accounts in the Ministry of Finance.

It provides financial management platform for all plan schemes, database of all recipient agencies, integration with core banking solution of banks handling plan funds. It also provides integration with state treasuries and efficient and effective tracking of fund flow to lowest level of implementation for plan scheme of government.

It also provides information across on fund utilisation leading to better monitoring, review and decision support system to enhance public accountability in the implementation of plan schemes.

Significance: Its introduction has resulted in effectiveness in public finance management through better cash management for transparency in public expenditure and real-time information on resource availability and utilisation across schemes. It also has resulted in improved programme administration and management, direct payment to beneficiaries, reduction of float in system and greater transparency and accountability in use of public funds.


Home Ministry asks NGOs to open Bank Accounts in Core Banking format

The Home Ministry has instructed 5,845 NGOs to open their accounts in banks having core banking facilities. The NGOs are also required to furnish the account details for real time access of security agencies in case of any discrepancy. The move is aimed at checking “errant” NGOs especially those organizations receiving foreign funding.

The Home Ministry has mandated the NGOs registered under the Foreign Contribution Regulation Act to have their accounts in either nationalised banks or in a few private banks that has core banking facilities.  Around 3,768 NGOs have been told that their accounts in banks does not have core banking facilities. Another 2,077 NGOs have been instructed to furnish their bank accounts details as such details are not available with the home ministry.

The significance of the move is that the core banking system with all of the branches of the networked banks interconnected would allow the security agencies to access the accounts of the NGOs on real time basis.


The government has taken a slew of measures to regulate the NGOs especially those receiving foreign funding. As a part of the measures, registration of more than 10,000 NGOs were suspended for non filing of annual returns as per the FCRA. And more than 1,300 were denied renewal over the past three years owing to various violations committed by these NGOs. In 2016, government had directed around 11,000 NGOs to file applications for renewal before February 28, 2017. Out of 11,000, only 3,500 NGOs had filed applications for renewal before the expiry date. As a result of all the above measures, there are only 24,000 active NGOs as against 40,000 in 2014-15.