SBI Seeks Clarity On Banking Rules For Accounts, Deposits And Assets Under Proposed FCRA Framework

(MENAFN- KNN India) New Delhi, Oct 1 (KNN) The State Bank of India (SBI) has supported the objectives of the proposed amendments to the Foreign Contribution (Regulation) Act (FCRA), while seeking clear rules on how banks should handle accounts, deposits and assets when an organisation's permission to receive foreign donations ends.

In a presentation before the Joint Parliamentary Committee (JPC) examining the FCRA Amendment Bill, 2026, SBI officials led by Chairman Challa Sreenivasulu Setty flagged a possible gap between the date an organisation's registration ceases and the date the bank receives official communication, PTI reported.

The bank said transactions processed during this period could later be questioned and suggested that restrictions should take effect only after an authenticated communication is received by the bank, with protection for transactions processed before then.

SBI Seeks Clarity On Accounts, Deposits

SBI also sought clarity on whether accounts should be frozen or continue operating when control of foreign contributions passes temporarily to a government-designated authority. It asked who would operate such accounts, whether incoming funds could be credited and how existing balances, fixed deposits and interest should be treated.

The bank suggested that funds remain in the existing account under restrictions while the authority's control is temporary, with transfer of funds possible on a specific order if the control becomes permanent.

As of August 31, SBI had 25,432 accounts of organisations covered by the FCRA at its New Delhi Main Branch. Of these, 10,992 were dormant, frozen, suspended or otherwise restricted, with a combined balance of Rs 165.33 crore.

SBI also cautioned that smaller and rural organisations could immediately lose control of funds if they miss registration renewal deadlines, potentially affecting ongoing programmes.

Law Ministry Details Asset Transfer Provisions

The Ministry of Law told the JPC that when an NGO's FCRA registration is cancelled or lapses, foreign contributions and assets acquired from them would temporarily pass to a government-designated authority.

The organisation would be required to provide full access to its books, records and properties and hand over documents, securities, lockers, safe deposits, keys and movable assets. The assets could permanently vest with the authority if the organisation does not regain registration within the prescribed period.

The proposed amendments also set statutory obligations for individuals and organisations whose foreign-funded assets are seized or vested, with provisions aimed at ensuring transparency, accountability and orderly management during the transition.

SBI said it supports a clear statutory framework but called for detailed rules, uniform banking procedures and timely communication of registration-status changes before the proposed provisions take effect.

(KNN Bureau)

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