Requirements to open an account at SBI New Delhi Main Branch for NGOs registered under the FCRA

The public notice given by the Government of India, Ministry of Home Affairs, Foreigners Division, FCRA Wing dated 31st October 2020 stipulated that all NGOs registered under FCRA need to open an account at sbi the specified main branch of State Bank of India in New Delhi, at 11, Sansad Marg, New Delhi – 110001. India has a whooping number of 1,55,943 active NGOs working across all states, employing close to 3 million people. Knowing SBI bank timings is very useful in aiding NGOs with the compliance process.

State Bank of India is an Indian multinational public sector bank. It is the oldest and largest Bank in India, serving over 45 crore customers through its network of over 22,000 branches, 62617 ATMs/ADWMs, and 71,968 BC outlets. 

SBI offers modern banking solutions like mobile banking, internet banking, sbi mini statement, SMS banking, quick missed call banking, etc. The Home Ministry made it mandatory for NGOs that need to receive foreign funding to open an FCRA account in SBI at New Delhi. 

What is FCRA is and why is it needed.

FCRA refers to Foreign Contribution (Regulation) Act. The Parliament of India have enacted it to strengthen the law passed to regulate the acceptance and utilization of foreign contributions by certain companies or associations or individuals (henceforth known as NGOs, Entity or Entities) to control or prohibit acceptance or utilization of foreign contribution for any activities detrimental to national interest or which may adversely affect national security. 

It was first passed in 1976 and was then repealed after the 2010 Act. The FCRA applies to all associations, groups, and NGOs which intend to receive foreign donations. All such NGOs must register themselves under the FCRA.

The Home Ministry stated that the annual inflow of funds between 2016-17 and 2018-19 was over Rs 58,000 crore. There were misuses of foreign donations by several NGOs. The new act empowers law enforcers to stop violators from using the funds received through holding a “summary inquiry”. Earlier, law enforcers could not do so unless the person or association had been “found guilty” of violation of the Act.

Why NGOs need to open an account at SBI NDMB

The Standard Operating Procedure (SOP) to facilitate opening and operating the FCRA Account at New Delhi Main Branch (NDMB) has been issued on 20th November 2020, under section 17(1) of the amended Foreign Contribution (Regulation) Act 2010. 

The deadline set by the Ministry of Home Affairs is 31st March 2021. No foreign inward remittance is allowed in any other FCRA account other than that opened in the New Delhi Main Branch (NDMB) of the State Bank of India. Receiving contributions in any account other than the FCRA Account at SBI NDMB is an offense under the Act.

The Home Ministry relaxed the norm by stipulating that the FCRA Account holder shall have complete freedom to transfer the foreign contribution (FC) received in the FCRA Account opened at SBI NDMB to any other FCRA Account. However, SBI NDMB shall allow foreign contribution transfer only to those FCRA Accounts after confirming that the Ministry of Home Affairs has granted the NGO or entity certificate or prior permission. No charges will be given by the SBI NDMB for any such transfers. Interest arriving from such foreign contributions will be deemed to be foreign contributions.

Types of accounts under the FCRA

The FCRA Amendment Act, 2020 provides for three types of Accounts for NGOs under the FCRA. They are:

1. Statutory Designated Account: 

This is the designated bank account, in which all foreign contributions must be received. It is to be opened in the Sansad Marg branch of the State Bank of India in New Delhi.

Some donors may insist on opening separate accounts for their grant, but under the Act, all foreign contributions can only come into one single designated account at SBI NDMB. 

2. Defacto Designated Account: 

Entities may also open another FCRA Account in any of the scheduled banks of their choice to utilize or keep the funds received at the SBI NDMB.

3. Utilization Account: 

Further, Entities may also open one or more accounts in one or more scheduled banks of their choice to which money can be transferred from the SBI NDMB, for utilization of one or more projects. However, this utilization account may not receive any other funds other than the foreign contribution from the SBI NDMB account. 

It is to be noted that the FAQs seems to suggest that there is no bar in transferring foreign contribution between the utilization accounts. However, Entities should preferably avoid such practices for keeping the accounting process simple and to avoid unnecessary scrutiny from the FCRA Department.

Requirements by NDMB for receiving foreign contribution 

For receiving the foreign contribution, the NDMB will require the following:

1. “FCRA Account” Number of the Beneficiary in the NDMB of SBI
2. Name of the Donor/ Remitter
3. Account number of the Donor/Remitter
4. Address of Donor/Remitter
5. Country of Residence of Donor/Remitter
6. Purpose of the receipt of funds per FEMA

To open the “FCRA Account” in the New Delhi Main Branch (NDMB), one need not go to New Delhi. The entity or NGO simply needs to go to their nearest State Bank of India branch or any SBI branch of their choice to act concerning opening an FCRA account. Knowing SBI bank timings is most useful in this case. 

Procedure for opening an FCRA Account with SBI NDMB

SOP for opening the FCRA account are as follows:

1. The applicant shall collect the Account Opening Form (AOF) physically or download it from the SBI website.
2. The duly filled-in form shall be submitted along with other documents for KYC, photo, and signature verification. 
3. Mandatory documents should include the KYCs of signatories and the KYCs of the Controlling Person / Beneficial Owner 
4. An applicant shall receive an acknowledgment from the AOF accepting branch, after which the branch will verify the AOF and KYCs submitted. After verification, they will send the documents to the NDMB via email within three days of receipt of the complete documents. 
5. NDMB shall confirm the applicant within one day of receipt of the verified documents.
6. The NDMB will notify the applicant through registered email ID as well as through SMS the details of the “FCRA Account” so opened within 3 working days from the date of receipt of duly verified scanned copies of the complete set of AOF and KYC documents from e-mail ID of the receiving branch. 
7. The Entity can maintain its existing FCRA accounts in other state registered banks for utilization or keeping purposes.
8. The details of the SBI NDMB specified by the central government are as follows:

To have a clearer picture of what is required, visit a branch of SBI at SBI bank timings to clear all doubts and get all questions answered. 

All NGOs and Entities are advised to visit the FCRA web portal at www.fcraonline.nic.in frequently for the latest updates.