State Bank of India has raised concerns about gaps in foreign donation handling when FCRA registration lapses occur. According to reports from The Economic Times, SBI officials led by Chairman Challa Sreenivasulu Setty presented to the Joint Parliamentary Committee regarding the Foreign Contribution (Regulation) Amendment Bill. The bank flagged a potential gap between the date a registration ceases and the date a bank is informed, with transactions processed during that interval being 'questioned'. SBI sought clarity on whether an account should be frozen or continue to operate once control passes to a government-appointed authority.
The bank sought detailed rules on how banks should handle an organisation's accounts and deposits when its permission to receive foreign donations ends. As reported by The Economic Times, SBI officials asked who would be allowed to operate the account, whether incoming payments could still be credited and how existing balances, fixed deposits and interest would be treated. The bank proposed keeping funds in the existing account under restrictions while the authority's control is temporary, with money potentially transferred on a specific order if control becomes permanent. During Tuesday's meeting of the Joint Committee, SBI highlighted that transactions processed during the gap period could be questioned, seeking protection for transactions processed before official notification.
According to the presentation to the JPC, as of August 31, SBI had 25,432 accounts for organisations covered by the foreign funding law at its New Delhi Main Branch. Of these, 10,992 were dormant, frozen, suspended or otherwise restricted, with a combined balance of ₹165.33 crore. As reported by The Economic Times, smaller or rural associations that miss a registration renewal deadline could lose control of their funds immediately upon expiry, with ongoing programmes being affected while funds and assets remain under the authority's control.
The proposed amendment establishes strict statutory obligations and responsibilities for individuals or organisations whose foreign funding or assets are seized or vested under the Act. According to The Economic Times, the bill proposes that foreign contributions and assets bought with them temporarily pass to a government-designated authority when an organisation's registration is cancelled, surrendered or ceases. The Ministry of Law told the JPC that when NGO assets are transferred to a government-appointed designated authority, the organisation will have to give full and unhindered access to its books of account, records, properties, books, accounts, documents, securities, lockers, safe deposits, keys and movable assets. The bill proposes that foreign contributions and assets could end up with the authority permanently if the organisation does not regain registration within a prescribed period.
Opposition parties have criticized the bill for potentially disadvantaging minority groups and impacting foreign funding for NGOs. As reported by The Economic Times, DMK MP P Wilson urged the JPC to allow stakeholders not only make suggestions but also flag objections in the draft law, suggesting that seven days time granted to people to make suggestions was too less and recommending at least four weeks should be given. The bill was introduced in Lok Sabha on March 25 and referred to the JPC on August 12 following consistent demand of opposition parties, which have raised strong objections alleging the legislation targets minorities and chokes legitimate funding for Christian NGOs and minority-run social welfare institutions.
