The Parliament clears “Foreign Contribution (Regulation) Amendment Bill, 2020”

Written by- Mohak Mittal

The Parliament clears the “Foreign Contribution (Regulation) Amendment Bill, 2020” with intent to “regulate the acceptance and utilisation of foreign contributions by individuals, associations and companies”[1]. The Bill prohibits acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest[2]. The Bill will amend the Foreign Contribution (Regulation) Act, 2010.

 Nityanand Rai, MoS Home Minister, at the time of presenting the Bill, said that,

“Annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered or granted prior permission under the said Act. Therefore, there is a need to streamline the provisions of the said Act by strengthening the compliance mechanism, enhancing transparency and accountability in the receipt and utilisation of foreign contribution.”

Main Features of the Bill

Transfer of foreign contribution

The Bill states that no person who is registered and granted a certificate or has obtained prior permission under this Act to receive any foreign contribution, also no person shall transfer such foreign contribution to any other person.

Prohibition to accept foreign contribution

The Bill prohibits any foreign contribution to be accepted by public servants. A public servant is substituted in addition to Judge, Government servant or employee of any corporation or any other body controlled or owned by the Government under sec 3(1)(c) of the Act;

Aadhaar for registration


The Bill states that any person who may require  Central Government’s prior permission or prior approval under section 11, or makes an application for grant of a certificate under section 12, or, as the case may be, for renewal of a certificate under section 16, shall provide as an 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.

FCRA account

The Bill specifies that foreign contribution shall be ‘received’ merely in an account designated by the bank as “FCRA account” in such branch of the SBI, New Delhi, as stated by the central government. Nevertheless, another “FCRA account” can be opened in any scheduled bank to keep or utilise the received contribution. Only foreign contribution shall be received or deposited in this account and no other fund.

Suspension of Certificate

If a person found guilty of violating any provisions of sec 14 (1) of the Act, the Central Govt may limit the usage of unutilised foreign contribution. Also, where the proceedings over violating any provisions are pending, the central government may suspend the certificate of a person for a period not exceeding 180 days as may be specified in the order.

Reduction in use of foreign contribution for administrative purposes

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.

[1] Statement and object of the Bill.

[2] Ibid.

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