Can deadline for opening FCRA accounts be extended, Delhi HC asks Centre

NGOs move court seeking extension of April 1 deadline in view of the pandemic

The Delhi High Court has asked the Ministry of Home Affairs to consider if the April 1, 2021, deadline for opening Foreign Contribution (Regulation) Act (FCRA) account for NGOs seeking to receive foreign funds can be extended in view of the COVID-19 pandemic.

Justice Prathiba M. Singh also asked the Ministry whether it could allow NGOs which have not been able to open FCRA accounts to receive foreign contributions, as long as they maintain records of the same, in accordance with the provisions of the Foreign Contribution Regulation Act, 2010.

“…Non-receipt of this contribution would lead to non-rendering of services, especially during the pandemic situation where there is an enormous need for such services,” the court observed.

The court’s query came during hearing of petitions filed by two NGOs operating out of Telangana and Andhra Pradesh. The NGOs claimed that they were “facing tremendous difficulty both in the opening of the FCRA account, and also in the subsequent approval which is to be obtained from the Ministry”.

The petitions raised issues relating to the opening of FCRA account in State Bank of India (SBI), New Delhi, pursuant to the amendment to Section 17 of the Foreign Contribution Regulation Act, 2010, which came into effect from September, 2020.

As per the new amendment, NGOs which receive foreign contributions are required to open an FCRA account in the New Delhi branch of the State Bank of India for the purpose of receiving foreign contributions.

As per a public notice issued by the Ministry on October 13, 2020, the deadline for applying for opening such an account was April 1, 2021.

The NGOs have sought to extend the deadline by a period of six months and for directing the Ministry to grant FC-6C certificates to the NGOs in an expeditious manner.

While both the NGOs have opened their respective FCRA accounts in SBI, they are awaiting approval of the Ministry on their FC6 form. They said the Ministry had not processed the forms.

“The MHA is directed to process the documents and grant the approval, if there are no defects, by the next date of hearing,” the court said, posting the case for further hearing on May 20.

The court also noted that there are several organisations, including NGOs, which have been approaching it with regard to the opening of their FCRA accounts and the approvals by the MHA.

“The amendment to Section 17 (FCRA) is not under challenge in these petitions, however, owing to the second wave of the COVID-19 pandemic and various difficulties which the organisations are stated to be facing, the MHA shall consider as to whether the deadline of 1st April, 2021 can be extended and if so, till when,” the court ordered.

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