The Foreign Contribution (Regulation) Amendment Act, 2020 No.33 2020


Received the assent of the President on the 28th September, 2020 and is effective from 29th September, 2020 

Amendment of section 3

In section 3 of the Foreign Contribution (Regulation) Act, 2010 (hereinafter referred to as the principal Act), in sub-section (1),—

(i) for clause (c), the following clause shall be substituted, namely:—

“(c) public servant, Judge, Government servant or employee of any corporation or any other body controlled or owned by the Government;”;

(ii) for the Explanation, the following Explanations shall be substituted, namely:—

‘Explanation 1.—For the purpose of clause (c), “public servant” means a public servant as defined in section 21 of the Indian Penal Code.

Explanation 2.—In clause (c) and section 6, the expression “corporation” means a corporation owned or controlled by the Government and includes a Government company as defined in clause (45) of section 2 of the Companies Act, 2013.’.


Section 3 lays down restrictions on persons in respect of receipt of foreign contributions. An additional category / person has been added to that list namely, the category of a public servant. (please refer to the annexure for definition of Public Servant).

However, this does not mean that an organisation that has a public servant on the Board is prohibited on accepting any foreign contribution. However, having a public servant on the Board may perhaps invite more scrutiny by MHA.


Substitution of new section for section 7

Prohibition to transfer foreign contribution to other person.

“7. No person who—

(a) is registered and granted a certificate or has obtained prior permission under this Act; and

(b) receives any foreign contribution, shall transfer such foreign contribution to any other person.”.


This section regulates the transfer and use of foreign contribution. Earlier a person receiving foreign contribution was permitted to transfer it to another organisation / person which was registered under FCRA or with special permission from Central Government.

This is now prohibited totally.

However, this does not mean that the foreign contribution cannot be used for the object for which it is received even though the utilisation is for a person as defined under section 2(m) of FCRA and includes and individual, Hindu Undivided Family, Association, Company registered under section 25 of the Companies act, 1956.

A reasonable construction of the section means that no sub-granting or sharing of the contribution is allowed, otherwise all activities would come to an end.

Amendment of section 8.

In section 8 of the principal Act, in sub-section (1), for the words “fifty per cent.”, at both the places where they occur, the words “twenty per cent.” shall be substituted.


This section regulates the application of foreign contribution. Section 8(1)(b) permitted a person in receipt of foreign contribution to utilise 50% of the receipt towards administration expense.

This limit has been reduced to 20%

Amendment of section 11.

In section 11 of the principal Act, in sub-section (2), in the proviso, for the words, brackets and figures “Provided that if the person referred to in sub-sections (1) and (2) has been found guilty”, the following shall be substituted, namely:—

“Provided that the Central Government, on the basis of any information or report, and after holding a summary inquiry, has reason to believe that a person who has been granted prior permission has contravened any of the provisions of this Act, it may, pending any further inquiry, direct that such person shall not utilise the unutilised foreign contribution or receive the remaining portion of foreign contribution which has not been received or, as the case may be, any additional foreign contribution, without prior approval of the Central Government:

Provided further that if the person referred to in sub-section (1) or in this sub-section has been found guilty”.


This is a dangerous amendment as it gives wide powers to the Central Government.

The sections dealt with the requirement of persons to be registered or receive prior permission under FCRA prior to receipt of any foreign contribution.

The proviso to this section stated that if a person permitted to receive foreign contribution was found guilty of any contravention of the FCR Act then the unutilised or unreceived amount of foreign contribution could not be utilised without the permission of the Central Government.

Now the scope of this proviso has been widened and there is no longer a confirmation of guilt but based on any information and / or report, a summary inquiry can be held and if there is any “reason to believe” that there is contravention then there can be no further utilisation of foreign contribution without the approval of the Central Government.

The issue of guilt being established has been done away with. So if any preliminary inquiry “believes” you have violated or contravened the Act then your further utilisation of foreign exchange is prohibited without the permission of the Central Government. 


Amendment of section 12.

In section 12 of the principal Act, after sub-section (1), the following sub-section shall be inserted, namely:—

‘(1A) Every person who makes an application under sub-section (1) shall be required to open ‘‘FCRA Account’’ in the manner specified in section 17 and mention details of such account in his application.’.


This section deals with the application and grant of the certificate of registration.

An additional clause has been substituted which requires that a bank account must be opened by the application for registration in accordance with the provisions of section 17 and the details of such FCRA Account will form part of the application.

Note : please read section 17 for more information


Insertion of new section 12A.

After section 12 of the principal Act, the following section shall be inserted, namely:—

Power of Central Government to require Aadhaar number, etc., as identification document.

“12A. Notwithstanding anything contained in this Act, the Central Government may require that any person who seeks prior permission or prior approval under section 11, or makes an application for grant of certificate under section 12, or, as the case may be, for renewal of certificate under section 16, shall provide as identification document, the Aadhaar number of all its office bearers or Directors or other key functionaries, by whatever name called, issued under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, or a copy of the Passport or Overseas Citizen of India Card, in case of a foreigner.”.


This is a new section and requires that all Trustees, Directors, Office Bearer and Key Functionaries to share / provide their Aadhar number to the authorities regulating FCRA at the time of application, renewal or for prior permission. 

Foreigners would require to provide a copy of their passport number or the OCI card.

Amendment of section 13.

In section 13 of the principal Act, in sub-section (1), for the words “for such period not exceeding one hundred and eighty days as may be specified”, the words “for a period of one hundred and eighty days, or such further period, not exceeding one hundred and eighty days, as may be specified” shall be substituted.


This section deals with the rights of the Central Government to suspend the certificate of registration / prior approval.

A maximum time limit was specified of 180 days for suspension. This period has been extended to multiple periods of 180 days with each period not exceeding 180 days.

During this time cannot receive or utilise any foreign contribution received.

Insertion of new section 14A.

Surrender of certificate.

“14A. On a request being made in this behalf, the Central Government may permit any person to surrender the certificate granted under this Act, if, after making such inquiry as it deems fit, it is satisfied that such person has not contravened any of the provisions of this Act, and the management of foreign contribution and asset, if any, created out of such contribution has been vested in the authority as provided in sub-section (1) of section 15.”.


This is again a new provision which permits any person to voluntarily surrender their certificate of registration.

The Central Government will scrutinise the application and will permit cancellation if no violation / contravention of the FCRA is observed.

There is an additional requirement which provides that the balance contribution and / or the assets created out of the foreign contribution will be vested in the authority as provided in section 15(1).

Amendment of section 15.

In section 15 of the principal Act,—

(i) in the marginal heading, after the word “cancelled”, the words “or surrendered” shall be inserted;

(ii) in sub-section (1), after the word and figures “section 14”, the words, figures and letter “or surrendered under section 14A” shall be inserted.


This section deals with the management of the foreign contribution of the persons whose certification has been cancelled or surrendered.

It provides that the unutilised contribution and the assets created from the foreign contributions received will be vested in an authority that will be prescribed. The authority will be permitted to utilise this contribution and apply these assets under the direction of the Central Government.

It is also provided that if the person whose certificate was cancelled / surrendered re-applies and gets re-registered under the Act the unutilised contributions and assets will be returned.

 Amendment of section 16.

In section 16 of the principal Act, in sub-section (1), the following proviso shall be inserted, namely:—

“Provided that the Central Government may, before renewing the certificate, make such inquiry, as it deems fit, to satisfy itself that such person has fulfilled all conditions specified in sub-section (4) of section 12.”.


This section deals with the renewal of the registration certificate.

An application for renewal has to be made 6 months before the expiry of the registration.

The Government has introduced an additional requirement where it has taken on the responsibility of making whatever further inquiries it wants to make and getting the required satisfaction before approving the renewal application.


Substitution of new section for section 17.

Foreign contribution through scheduled bank.

’17. (1) Every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as “FCRA Account” by the bank, which shall be opened by him for the purpose of remittances of foreign contribution in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify in this behalf:

Provided that such person may also open another ‘‘FCRA Account’’ in any of the scheduled bank of his choice for the purpose of keeping or utilising the foreign contribution which has been received from his ‘‘FCRA Account’’ in the specified branch of State Bank of India at New Delhi:

Provided further that such person may also open one or more accounts in one or more scheduled banks of his choice to which he may transfer for utilising any foreign contribution received by him in his ‘‘FCRA Account’’ in the specified branch of the State Bank of India at New Delhi or kept by him in another ‘‘FCRA Account’’ in a scheduled bank of his choice:

Provided also that no funds other than foreign contribution shall be received or deposited in any such account.

(2) The specified branch of the State Bank of India at New Delhi or the branch of the scheduled bank where the person referred to in sub-section (1) has opened his foreign contribution account or the authorised person in foreign exchange, shall report to such authority as may be specified,—

(a) the prescribed amount of foreign remittance;

(b) the source and manner in which the foreign remittance was received; and

(c) other particulars,

in such form and manner as may be prescribed.’.


This section deals with the receipt of foreign contribution into a specified bank account.

Till today the person could open an account with any bank with core banking and PFMS for the first receipt of foreign contribution. Now a restriction is being imposed that the first receipt must be in the State Bank of India at New Delhi.

The person is also allowed to have a second account to transfer the funds from the FCRA Account with SBI to the other account.

A third account may also be kept into which funds can be transferred for utilisation of the funds from the first or second accounts.

There is a restriction on receipt or deposit of any fund in the second or third account except foreign contribution. 

Subclause (2) deals with reporting requirements of the bank receiving the initial receipt of foreign contribuion i.e. the State Bank of India, New Delhi.

Prima facie it appears that only the SBI branch at New Delhi will have to do the reporting.



  1. “Public servant”.—The words “public servant” denote a person falling under any of the descriptions hereinafter following; namely:—


(Second) —Every Commissioned Officer in the Military, [Naval or Air] Forces of India];


[(Third) —Every Judge including any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions;]


(Fourth) — Every officer of a Court of Justice [(including a liquidator, receiver or commissioner)] whose duty it is, as such officer, to investigate or report on any matter of law or fact, or to make, authenticate, or keep any document, or to take charge or dispose of any property, or to execute any judicial process, or to administer any oath, or to interpret, or to preserve order in the Court, and every person specially authorized by a Court of Justice to perform any of such duties;


(Fifth) — Every juryman, assessor, or member of a panchayat assist­ing a Court of Justice or public servant;

(Sixth) — Every arbitrator or other person to whom any cause or matter has been referred for decision or report by any Court of Justice, or by any other competent public authority;


(Seventh) —Every person who holds any office by virtue of which he is empowered to place or keep any person in confinement;


(Eighth) — Every officer of  [the Government] whose duty it is, as such officer, to prevent offences, to give information of of­fences, to bring offenders to justice, or to protect the public health, safety or convenience;


(Ninth) — Every officer whose duty it is, as such officer, to take, receive, keep or expend any property on behalf of  [the Govern­ment], or to make any survey, assessment or contract on behalf of  [the Government], or to execute any revenue process, or to investigate, or to report, on any matter affecting the pecuniary interests of  [the Government], or to make, authenticate or keep any document relating to the pecuniary interests of  [the Govern­ment], or to prevent the infraction of any law for the protection of the pecuniary interests of  [the Government];


(Tenth) — Every officer whose duty it is, as such officer, to take, receive, keep or expend any property, to make any survey or assessment or to levy any rate or tax for any secular common purpose of any village, town or district, or to make, authenti­cate or keep any document for the ascertaining of the rights of the people of any village, town or district;


[(Eleventh) —Every person who holds any office in virtue of which he is empowered to prepare, publish, maintain or revise an elec­toral roll or to conduct an election or part of an election;]


[(Twelfth) —Every person—

(a) in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government;

(b) in the service or pay of a local authority, a corporation established by or under a Central, Provincial or State Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956).] Illustration A Municipal Commissioner is a public servant.


Explanation 1.—Persons falling under any of the above descrip­tions are public servants, whether appointed by the Government or not.


Explanation 2.—Wherever the words “public servant” occur, they shall be understood of every person who is in actual possession of the situation of a public servant, whatever legal defect there may be in his right to hold that situation. 


Explanation 3.—The word “election” denotes an election for the purpose of selecting members of any legislative, municipal or other public authority, of whatever character, the method of selection to which is by, or under, any law prescribed as by election.] 


(Rajasthan) —In section 21, after clause twelfth, the following new clause shall be added, namely:— “Thirteenth.—Every person employed or engaged by any public body in the conduct and supervision of any examination recognised or approved under any law. Explanation.—The expression ‘Public Body’ includes—


(a) a University, Board of Education or other body, either estab­lished by or under a Central or State Act or under the provisions of the Constitution of India or constituted by the Government; and


(b) a local authority.” [Vide Rajasthan Act, 4 of 1993, sec. 2 (w.e.f. 11-2-1993)].

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