INTEGRATION OF BANK ACCOUNTS WITH PFMS UNDER FCRA

Reproduced from Standards & Norms, Legal Series * Vol X * Issue 10 * January 2018

 Authors:

Dr. Manoj Fogla
Dr. Sanjay Patra (ED, FMSF)
Sandeep Sharma, Head Prog, FMSF

 Pages are reorganized to upload the document in the website.

 INTRODUCTION

1.1.1 The Ministry of Home Affairs, Foreigners Division has issued a notification No. 2/ 21022/58(951)/2017/FCRA(MU), regarding integration of bank accounts under FCRA 2010 with PFMS. The copy of the notification is provided in Annexure 1.

1.1.2 Under PFMS, the banks are required to integrate their system with the Government PFMS which will enable the FCRA Department to track transactions online.

1.1.3 As per the notification, only 32 banks in the country have integrated their systems with PFMS. Therefore the FCRA Department has directed all the FC registered organisations to shift their bank accounts to one of the 32 notified banks. The list of notified banks is provided in Annexure 2.

1.1.4     The organisations which are already having their account in one of these 32 banks are not required to do anything in this regard.

1.1.5 All other organisations should change their bank accounts to one of the 32 notified banks. It may be noted that this notification applies to both designated bank account and multiple bank accounts.

1.1.6 This exercise shall be completed expeditiously within one month of the publication of this notice with intimation of the details of the bank accounts so opened in the prescribed format as provided under Rules 9 and 17A of Foreign Contribution (Regulation) Rules, 2011.

1.1.6 The organisations who have received prior permission are also required to change the bank account as per the notification.

1.1.7 Multiple bank accounts are also required to be shifted. In this context it has been noticed that the FCRA Department website does not allow multiple uploading of Form FC 6 simultaneously. For such cases the way forward has also been discussed here in this issue.

WHAT IS PFMS?

1.2.1 The Public Financial Management System (PFMS), earlier known as Central Plan Schemes Monitoring System (CPSMS), is a web-based online software application developed and implemented by the Office of Controller General of Accounts (CGA). PFMS was initially started during 2009 as a Central Sector Scheme of Planning

Commission with the objective of tracking funds released under all Plan schemes of

GoI, and real time reporting of expenditure at all levels of Programme implementation. Subsequently in the year 2013, the scope was enlarged to cover direct payment to beneficiaries under both Plan and non-Plan Schemes. The latest enhancement in the functionalities of PFMS commenced in late 2014, wherein it has been envisaged that digitization of accounts shall be achieved through PFMS and the additional functionalities would be built into PFMS in different stages. Beginning with Pay & Accounts Offices payments, the O/o CGA did further value addition by proposing to bring in more financial activities of the Government of India in the ambit of the project.

1.2.2 The primary objective of PFMS is to facilitate sound Public Financial Management System for Government of India (GoI) by establishing an efficient fund flow system as well as a payment cum accounting network. PFMS provides various stakeholders with a real time, reliable and meaningful management information system and an effective decision support system, as part of the Digital India initiative of GoI.

1.2.3 The enhanced application is envisaged to cater to all Plan and Non Plan payments of GoI, all tax and non-Tax receipts and also functions such as a comprehensive HRMIS and self-contained pension as well as GPF modules. Futuristically, all the existing standalone systems currently catering to various functions in Government of India will be subsumed in PFMS.

1.2.4 The biggest strength of PFMS is its integration with the Core banking system in the Country. As a result, PFMS has the unique capability to push online payments to almost every beneficiary/vendor. At present, PFMS interface is having interface in addition to the Core Banking System (CBS) of all Public Sector Banks, Regional Rural Banks, major private sector banks, Reserve Bank of India, India post and Cooperative Banks.

PROCEDURE FOR CHANGE OF BANK ACCOUNT

1.3.1 When a change of bank account becomes a necessity, the following procedure may be followed :

  • A new bank account which is proposed to be designated bank account should be opened by depositing the minimum amount required for opening of the account.
  • The new rule allows change of designated Bank Account. It may be noted that earlier, for change in designated Bank Account, prior approval of the FCRA Department was necessary.
  • Now onwards such change can be made without permission and only an intimation is required to be filed electronically online in Form FC 6 within 15 days of such change.
  • The change in bank acount should be accompanied by the Resolution of Governing Body for proposed change of Bank/Bank Account. A model format of the minutes along with the resolution for change of bank account is provided in Annexure 3. This resolution is not required to be reported.

(vi) It is not legally necessary to close the old account. Therefore, the organisation may use the old account as a domestic account. But it is desirable to close the old account, to ensure that even by mistake the foreign funds are not credited to the old account.

1.3.2 The Rules of 17A as Amended by Foreign Contribution Regulation Rule, 2015 published vide Notification No. GSR (E)  dated the 14th December, 2015.

**17A. Change of designated bank account, name, address, aims, objectives or Key members of the association :-

A person who has been granted a certificate of registration or prior permission under section 11 of the Act shall intimate electronically online in Form FC-6, within fifteen days, of any change in the following, namely:-

  • name of the association or its address within the State for which registration/ prior permission has been granted under the Act;
  • its nature, aims and objects and registration with local/relevant authorities.;
  • bank and/or branch of the bank and/or designated foreign contribution account number; and
  • key members of the association if at any point of time such change causes replacement of fifty percent or more of the original key members as reported in the application for grant of registration/ prior permission/ renewal of registration under the Act.”;

1.4.1 Under FCRA 2010 organisations are permitted to open multiple bank account for utilisation purposes, in addition to the primary designated bank account. After this notification all bank accounts including the multiple bank account should be shifted to a PFMS integrated bank as per the list provided in Annexure 2.

IS IT PRACTICALLY POSSIBLE TO SHIFT MANY MULTIPLE BANK ACCOUNTS

AND FILE FORM FC 6 FOR EACH ONE OF THEM

1.5.1 It is practically very difficult to shift many multiple bank accounts and file Form FC 6 for each one of them. It has been noticed that the FCRA website does not permit multiple uploading of Form FC 6 regarding change in bank account.

WAY FORWARD

1.4.1    It is suggested that the following way forward may be adopted:

  • The designated FC bank account should be changed and shifted as per the procedure prescribed.
  • All the multiple bank account can be closed by transferring the balance to the existing designated bank account.
  • New multiple bank accounts may be opened as per need in the PFMS integrated bank. Further, intimation regarding such new bank account may be sent to FCRA Department. In case the website does not allow filing of multiple Form FC 6 for such bank accounts, then the organisation may continue operating the new bank accounts and also contact for support from FCRA Department at the following number and email.
  • Phone No.: 011-23077505 Email: support-fcra@gov.in

 

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Published by Dr. Sanjay Patra on behalf of Voluntary Action Network India (VANI)

FINANCIAL MANAGEMENT SERVICE FOUNDATION       BB-5, Greater Kailash Enclave Part – II,

‘ACCOUNTABILITY HOUSE’, A-5, Sector 26, Noida-201 301                                                                           

New Delhi – 110048

Tel. : 91-120-4773200, website : www.fmsfindia.org www.vaniindia.org e-mail : fmsf@fmsfindia.org


Annexure 1

No. 2/21022/58(951)/2017/FCRA(MU)

Government of India

Ministry of Home Affairs

(Foreigners Division)

*********

Major Dhyan Chand National Stadium

Outer India Gate, New Delhi-110001

Dated: 21.12.2017 NOTICE

Subject: Integration of Bank Accounts (of individuals/organisations who receive foreign contributions under the FCRA, 2010) with the PFMS.

Whereas Foreign Contribution (Regulation) Act, 2010 (FCRA, 2010) provides for the regulation of acceptance of the foreign contribution (FC) or foreign hospitality by certain individuals/associations/organisations/companies to ensure that such contributions or hospitality is not being utilised for the activities detrimental to the national interests and matters connected therewith or incidental thereto. Under the powers conferred by the Act, Central Government has decided that all banks where the FCRA registered persons/organisations have opened their FC accounts would be integrated with Public Financial Management System (PFMS) for providing a higher level of transparency and hassle free reporting compliance.

  1. Whereas, some banks have already integrated their systems with the PFMS for the above purpose.
  2. Whereas, many banks have still not completed the above integration of their systems with the PFMS despite repeated letters, directions and meetings.
  3. Therefore in exercise of the powers conferred under section 46 of the FCRA, 2010, the Central Government hereby directs all persons who are either registered or who have sought prior permission under the FCRA, 2010 shall open their bank accounts as mandated in section 17 of the FCRA, 2010 in one or more of the banks in the enclosed list. This exercise shall be completed expeditiously within one month of the publication of this notice with intimation of the details of the bank accounts so opened in the prescribed format as provided under Rules 9 and 17A of Foreign Contribution (Regulation) Rules, 2011.

Sd

(Ravinder Kumar)

Director (MU)

Tel No: 23077510

Annexure 2

LIST OF 32 NOTIFIED BANKS

  1. No. Name of Bank
  • Abu Dhabi Commercial Bank
  • ICICI Bank
  • The Cosmos Co-Operative Bank
  • BANK OF BARODA
  • State Bank Of india
  • South Indian Bank
  • IDBI Bank
  • Central Bank Of India
  • Corporation Bank
  • Karur Vysya bank
  • Tamilnad Mercantile Bank Ltd.,
  • The Catholic Syrian Bank Ltd
  • HDFC Bank
  • UCO Bank
  • IndusInd bank linited
  • City Union Bank
  • Syndicate Bank
  • Allahabad Bank,
  • THE JAMMU AND KASHMIR BANK LTD
  • Punjab National Bank 21 Allahabad UP Gramin Bank 22 DCB Bank Ltd.
  • Manipur state Co-op Bank
  • Vijaya Bank
  • Bombay Mercantile Co-operative Bank Ltd.
  • Yes Bank
  • Oriental Bank Of commerce
  • Dena Bank
  • Bank Of Maharashtra
  • Canara Bank
  • Andhra Bank
  • Axis Bank

 

 

Annexure 3

MODEL FORMAT OF MINUTES REGARDING

CHANGE IN BANK ACCOUNT & RESOLUTION

Minutes of the meeting of the members of  “………………………………………….. organisation” held on ………………………, 20 ………………… .

A meeting of the board of members of “………………………………………………….. Organisation” was held on ……………………….., 20 …………. at …….. a.m./p.m. in the Registered Office  at

………………………………………………………………

Members present :

  1. i) ………………………………………………. ii) ………………………………………………. iii) ………………………………………………. iv) ……………………………………………….
  2. v) ……………………………………………….
  • /Mrs/Ms. …………………………………………………………… was voted to the chair.
  • Leave of absence :

Letters from Mr./Mrs./Ms. …………………………………………. and Mr./Mrs./Ms.

……………………………………. regretting their inability to attend the meeting was placed on the table and leave of absence was granted.

  • Confirmation of the minutes of the previous meeting :

The minutes of the meeting held on ………………………………………………, 20 ……………. were read and confirmed.

  • Change of Designated FCRA Bank Account :

The governing body member, Mr./Mrs./Ms. ……………………………………… proposed that for administrative convenience or other reasons ……………

…………………………………………………………., a new savings/current account be opened with …………………….. bank at ………………………… The proposal was seconded by Mr./ Mrs./Ms. …………………………………….. and passed unanimously. It was further proposed that all the necessary legal compliances under FCRA, 2010 and other statutes be made as per the legal requirements.

Accordingly, the following resolution was passed :

“RESOLVED that a new savings/current account be opened in the name of

“………………………………” with ………………. bank, ………………….. branch.

FURTHER RESOLVED that Mr./Mrs./Ms. …………………………………………

………….., Mr/Mrs./Ms. ………………………………………………………… and Mr./Mrs./Ms.

………………………………………………………….. be the authorised signatories and the account may be operated by any two of the authorised signatories jointly”.

5)      Other issues, if any :

………………………………………………………………………………………………….

………………………………………………………………………………………………………………….

The meeting terminated with a vote of thanks to the chair

Chairman

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