New Delhi, Sep 29: The State Bank of India (SBI) is learnt to have supported the objectives of the proposed amendments to the Foreign Contribution (Regulation) Act while seeking clear rules on how banks should handle an organisation’s accounts and deposits when its permission to receive foreign donations ends.
In a presentation to the Joint Parliamentary Committee (JPC) examining the Foreign Contribution (Regulation) Amendment Bill, 2026 on Tuesday, a team of top SBI officials, led by its Chairman Challa Sreenivasulu Setty, said the bill provides for government control of foreign contributions and assets in such cases, but leaves the detailed banking procedure to be prescribed in rules, sources said.
The sources said the SBI flagged a potential gap between the date a registration ceases and the date a bank is informed.
Transactions processed during that interval could be “questioned”, it said.
The SBI delegation suggested that restrictions take effect for the bank when it receives an authenticated communication, and sought protection for transactions processed before then.
The bank sought clarity on whether an account should be frozen or continue to operate once control passes to a government-appointed authority.
It also 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 Ministry of Law, in its presentation, told the JPC that when the assets of an NGO are transferred to a government appointed designated authority after its FCRA registration is cancelled or has lapsed, the organisation will have to give full and unhindered access to its books of account, records, properties.
During its clause-by-clause briefing, the representatives of the law ministry also said that such organisation will also have to hand over to the designated authority all books, accounts, documents, securities, lockers, safe deposits, keys and movable assets.
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. They could end up with the authority permanently if the organisation does not regain registration within a prescribed period.
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.
It outlines requirements to ensure transparency, accountability, and smooth transition management.
The ministries of law and home affairs gave a clause-by-clause briefing to the JPC on the bill which has invited criticism from opposition parties and Christian groups over its contentious provisions.
A 31-member committee, headed by BJP MP Sanjay Jaiswal, was constituted to examine the provisions of the legislation in details before coming out with a report.
The sources said the officials of the two ministries gave detailed presentations, explaining the reasons behind bringing the amendments to the 2010 law and its future actions.
All organisations and NGOs receiving foreign funding have to mandatorily register under FCRA and their activities are closely monitored by the home ministry acting as nodal authority.
The sources said the SBI proposed keeping funds in the existing account under restrictions while the authority’s control is temporary.
If that control becomes permanent, the money could be transferred on a specific order, the SBI said.
As of August 31, the 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 Rs 165.33 crore, according to the note presented to the JPC members.
The bank also said smaller or rural associations that miss a registration renewal deadline could lose control of their funds immediately upon expiry.
Ongoing programmes could be affected while funds and assets remain under the authority’s control, it said.
The SBI said it supports a clear legal framework for managing foreign contributions when an organisation’s registration ends. It called for detailed rules, common procedures for banks and prompt updates on registration status before the new provisions take effect.
Several top government law officers also made presentations before the JPC.
Meanwhile, DMK MP P Wilson urged chairperson of the JPC Sanjay Jaiswal to allow stakeholders not only make suggestions but also flag objections in the draft law.
In a letter to Jaiswal, the Rajya Sabha member also underlined that seven days time granted to people to make suggestions was too less. He suggested that at least four weeks should be given.
The Lok Sabha Secretariat had on Monday issued a statement on behalf of the committee inviting suggestions on FCRA Bill.
Referring to the statement, Wilson said, “Objections, and not merely suggestions, should be invited … the press communique invites only ‘views/suggestions’ on the specific clauses of the Bill.”
He said the bill will have wide-ranging and far-reaching implications for charitable organisations, educational institutions, hospitals, religious institutions of every denomination, and numerous other stakeholders across the country.
The bill was introduced in Lok Sabha on March 25 and referred to the JPC on August 12 following consistent demand of the opposition parties, which also alleged that certain provisions of the legislations were highly objectionable.
Opposition parties, which have raised strong objections to the FCRA bill, alleged that it targets minorities as certain provisions will choke legitimate funding for Christian NGOs and minority-run social welfare and educational institutions.
The government has rejected the charges and challenged the opposition parties to identify even one provision that discriminates against minorities.
The government has also maintained that the proposed legislation is not religion-specific and is aimed at regulating foreign contributions.
While introducing the bill in Lok Sabha, Union Minister of State for Home Nityanand Rai had said the legislation aims to enhance transparency and ensure proper utilisation of funds received from abroad.
Countering the opposition’s charges that the bill is “dangerous”, Rai had asserted that it is “indeed dangerous” for those who engage in “forced religious conversion” using foreign contributions, as well as to individuals who “abuse foreign funding” for personal gain. (PTI)
