How to get a FCRA certificate for an NGO? Eligibility & Procedure

The Foreign Contribution Regulation Act, or FCRA, is a federal law that governs foreign contributions. If a non-profit organization has an FCRA certificate, it is eligible to receive funds from abroad. The NGO must be three years old in order to receive an FCRA certificate.

A large amount of money is released by the Indian government and foreign funding agencies for the benefit of the poor. These funds are distributed on a regular basis to FCRA-certified non-profits. Many of these organizations, however, do not make proper use of these funds. In India, the United Nations Organization (UNO) has a number of projects in the works. The United Nations Organization (UNO) focuses on awarding grants to organizations that have done outstanding work in helping the poor. So, the best mindset for obtaining adequate funds is to focus your efforts on helping others.

The first requirement for FCRA registration is that your non-profit organization be three years old. The second most important requirement for FCRA registration is that you have spent a minimum of 10 lakhs rupees under the social expenditure clause in the previous three years. If you meet these two requirements, you are eligible to receive an FCRA certificate. Following that, you can apply for FCRA online at their website. The IB department will verify your work, and once they approve your NGO and its work, you will receive an FCRA certificate for the next five years. After five years have passed, you must renew your FCRA registration for another five years. Only if the government finds your work to be commendable and genuine will you be granted a renewal.

Foreign funding has become an important part of the NGO sector in India. However, obtaining foreign funds is not as simple as it appears. Many NGOs have been blacklisted by the Indian government for receiving funds but doing no work.

To put it another way, if you don’t work, you won’t get any money. The purpose of an NGO is to serve society, and serving yourself could jeopardize the organization’s existence. Your NGO registration could be revoked, and you could face a lawsuit from the Indian government. So, if you want to get an FCRA certificate, you must be willing to work for society.

Process flow after opening of FCRA Bank Account for NGO or Section 8 Company to receive foreign contribution through SWIFT mode

i.) The NDMB will allow receipt of foreign contribution only in the “FCRA Bank Account” opened in NDMB after confirming that the MHA has already granted a registration certificate or prior permission under section 12 of FCRA, 2010.

The foreign inward remittance received should invariably contain following details:

•   “FCRA Bank Account” Number of the Beneficiary in the NDMB of SBI
•   SWIFT Code of NDMB (SBININBB104)
•   Name of the Beneficiary
•   Name of the Donor/ Remitter
•   Account number of the Donor/Remitter
•   Donor/Remitter’s Address
•   Donor/Remitter’s Country of Residence

ii.) In case of NGO / Sec8 company entities without FCRA, the NDMB shall open the FCRA Bank Account and then wait for MHA’s decision on their FCRA application for grant of prior permission or registration certificate. As soon as the MHA approval for such registration or prior permission is conveyed to NDMB through an e-mail, NDMB shall allow inflow of foreign contribution into the relevant account from that date.

  iii.) SBI, NDMB shall intimate the customers, through an email and SMS regarding receipt of foreign contribution.

iv.) The customers will be required to submit an undertaking detailing the purpose of the receipt of funds as per FEMA declaration and RBI guidelines to the SBI Branch, where it had initially submitted the FCRA account opening form. The SBI Branch shall then forward duly scrutinized copies to New Delhi Main Branch on the designated email id ([email protected]).

v.) Standard Forex conversion rate as permitted under the FEMA guidelines and RBI instructions to be applied on the inflow of foreign currency. It shall be duly intimated to the FCRA account holder through an email.

vi.) The FCRA Account holder shall have complete freedom to transfer the foreign contribution (FC) received in an FCRA Bank Account opened in NDMB to another FCRA Account, if any, of his choice opened in any branch of any Scheduled Commercial Bank as per its convenience for keeping or utilization. It may also avail Internet Banking facility (with full transaction rights) with the NDMB.

vii.) NDMB will not levy any charges / fee etc on any transfer of foreign contribution from the FCRA Bank Account to FCRA Utilization Account, if any, of the NGO. For each such transfer, the “FCRA Account” holder to be informed through an email as well as SMS immediately.