Home Ministry asks NGOs to open Bank Accounts in Core Banking format

The Home Ministry has instructed 5,845 NGOs to open their accounts in banks having core banking facilities. The NGOs are also required to furnish the account details for real time access of security agencies in case of any discrepancy. The move is aimed at checking “errant” NGOs especially those organizations receiving foreign funding.
The Home Ministry has mandated the NGOs registered under the Foreign Contribution Regulation Act to have their accounts in either nationalised banks or in a few private banks that has core banking facilities.  Around 3,768 NGOs have been told that their accounts in banks does not have core banking facilities. Another 2,077 NGOs have been instructed to furnish their bank accounts details as such details are not available with the home ministry.
The significance of the move is that the core banking system with all of the branches of the networked banks interconnected would allow the security agencies to access the accounts of the NGOs on real time basis.

Background

The government has taken a slew of measures to regulate the NGOs especially those receiving foreign funding. As a part of the measures, registration of more than 10,000 NGOs were suspended for non filing of annual returns as per the FCRA. And more than 1,300 were denied renewal over the past three years owing to various violations committed by these NGOs. In 2016, government had directed around 11,000 NGOs to file applications for renewal before February 28, 2017. Out of 11,000, only 3,500 NGOs had filed applications for renewal before the expiry date. As a result of all the above measures, there are only 24,000 active NGOs as against 40,000 in 2014-15.

Month: Current Affairs - May, 2017