The Foreign Contribution (Regulation) Amendment Act, 2020

The Foreign Contribution (Regulation) Amendment Act, 2020 (FCRA Amendment Act) which has come into force on 29 September 2020  amends the Foreign Contribution (Regulation) Act, 2010 (FCRA) and in order to enhance transparency and accountability in the receipt and utilisation of foreign contribution and facilitate genuine non-governmental organisations or associations who are working for the welfare of the society.

The key features of the FCRA Amendment Act are:

  • “Public servant” prohibited from receiving foreign contribution

The FCRA Amendment Act adds “public servant” as defined in Section 21 of the Indian Penal Code, 1860 to the list of persons who are prohibited from receiving foreign contribution(s). The FCRA already prohibited judges, government servants and employees of government owned or controlled corporations or bodies from receiving foreign contribution.

  • Transfer of foreign contribution prohibited

The FCRA Amendment Act prohibits persons authorized under the FCRA to receive foreign contributions from transferring such foreign contributions to any other person.

  • Reduction in use of foreign contribution for administrative purposes

The FCRA Amendment Act decreases the cap on use of foreign contributions for administrative expenses to 20% from 50%.

  • FCRA bank account mandated to be opened in a branch of the State Bank of India in Delhi

The recipient of foreign contribution will now be required to receive such contribution only in an account designated as an “FCRA Account” opened in a branch of the State Bank of India in New Delhi. However, the FCRA Amendment Act also provides flexibility to the recipient to also open another FCRA Account in any Indian scheduled bank for the purpose of keeping or using the foreign contribution which has been received in such recipient’s “FCRA Account” with the State Bank of India in New Delhi.

  • Aadhaar for registration

The FCRA Amendment Act empowers the government to necessitate any person who applies for permission or registration (or its renewal) under the FCRA to provide Aadhaar cards of all its office bearers or directors or other key functionaries or, in case of foreigners, a copy of the passport or overseas citizen of India card.

  • Period of suspension’s maximum limit increased

Under the FCRA Amendment Act, the government has been given the power to suspend the registration certificate (which means that the concerned foreign contribution cannot be received/ utilised) of a person for up to 360 days (which was earlier 180 days) pending an inquiry for cancellation of the concerned FCRA registration.

  • Surrender of certificate

The FCRA Amendment Act enables the government to allow a person to surrender the registration certificate if, post an inquiry, the government is satisfied that such person has not breached any provisions of the FCRA, and the management of the concerned person’s foreign contribution (and related assets) has been entrusted in an authority prescribed by the government.

  • Renewal of license

The FCRA Amendment Act provides that the Central Government may conduct an inquiry before renewing the certificate of registration to satisfy itself that such person (i) is not fictitious or benami, (ii) has not been prosecuted or convicted for creating communal tension or indulging in activities aimed at religious conversion, and (iii) has not been found guilty of diversion or misutilisation of funds, among other conditions.

The FCRA Amendment Act can be accessed through the following link: