Section 11 of the Foreign Contribution (Regulation) Act, 2010 stipulates that no person having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution unless such person obtains a certificate of registration or prior permission from Central Government.
As on 16/07/2014, a total number of 42,569 organisations have been registered under the Foreign Contribution (Regulation) Act, 2010.
Inspection of records and accounts of the associations is carried out where alleged violations of any of the provisions of the Foreign Contribution (Regulation) Act, 2010 (FCRA) and Foreign Contribution (Regulation) Rules, 2011 (FCRR) is received from various sources, including field agencies and also on the basis of the complaints received from public. The number of on-site inspections carried out during the year is 55 in 2011, 29 in 2012, 33 in 2013 and 27 in the current year upto June.
The irregularities detected, in general, range across the following categories:
(i) Receipt of foreign contribution without registration or prior permission under FCRA.
(ii) Not maintaining exclusive accounts for Foreign Contribution (FC) as required under FCRA.
(iii) Non-submission of mandatory annual returns within the stipulated period.
(iv) Transfer of FC to associations not registered under FCRA.
(v) Utilization of FC amount for the purposes different from the grant or different from the objectives of the recipient association.
(vi) Registration of assets from FC in the individual names rather than in the name of the association.
(vii) Change of bank or bank account number without the prior permission of the Government.
(viii) Changing the registered office of the association without intimation to the Government.
On the basis of inspection, action has been taken against the defaulting associations, which include cancellation of registration, prohibiting the association from receiving foreign contribution, suspension & freezing of bank account, referring cases for further investigation and prosecution to CBI/concerned State Police, compounding of offence by payment of prescribed monetary penalty.
Under FCRA, 2010 and FCRR, 2011, every bank has been mandated to report receipt of foreign contribution by persons not having registration/ prior permission thereunder as well as sending report to the Central Government within thirty days of receipt of any foreign contribution in excess of one crore rupees or equivalent in a single transaction or in transactions within a duration of thirty days by any person. Besides, from time to time, on receipt of adverse inputs against a particular foreign donor, banks are advised through Reserve Bank of India to seek prior approval of the Government for crediting of funds in to the recipient account from such donor.
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