Govt stops foreign funding to 156 NGOs for defying order

NEW DELHI: The Union home ministry has suspended the foreign funding licence of 156 NGOs and associations issued under the Foreign Contributions Regulation Act, 2010, for their failure to open bank account(s) in one or more of the banks linked to the Public Financial Management System (PFMS).

Among the associations barred from receiving foreign contributions for a period of 180 days, pending consideration of cancellation of their certificates, is Alliance Francaise de Bombay, a Mumbai-based NGO that is part of an international network and works under the triple umbrella of the French government, Alliance Française Foundation based in Paris and an Indian board.

Though the defaulting NGOs were served a show-cause notice on June 29 this year for not complying with a Central government notice of December 2017 asking FCRA-registered NGOs to open accounts, as mandated in Section 17 of FCRA, in one or more banks integrated with PFMS, they had failed to file a response within the prescribed 15-day time limit.

Integrated of an FCRA-registered NGO’s bank account with PFMS, a web-based application for payment, accounting and reconciliation of government transactions, is aimed at keeping the government up to date about the frequency, number and quantum of foreign contributions made to and utilised by such NGO.

“..the said associations have neither given any reply/response to the show-cause notice nor opened their bank accounts(s)...in PFMS-integrated banks. Therefore, their certificates are liable to be cancelled as per the provision of Section 14(1)(d) of the FCRA, 2010,” the home ministry stated in an order dated December 6, 2018.

All entities registered under FCRA or who have sought prior permission under FCRA, as per the Central government notice dated December 6, 2017, were required to open their bank accounts, as mandated in Section 17 of the FCRA, in one or more of 32 banks that had already integrated their system with the PFMS. This exercise was to be completed within one month of publication of the notice.

However, the 156 NGOs did not open their bank account in PFMS-integrated banks, which now total 59, violating provisions of the FCRA by not complying with directions of the Central government.

“Now, therefore, in exercise of the power conferred by Section 13 of FCRA, pending cancellation of their certificates, the Central government hereby suspends the registration under FCRA, of the said associations (including their branches and units) for a period of 180 days with effect from the date of this order...,” the home ministry said in its order.