Cracking the whip, the government has barred 156 NGOs from receiving foreign funds for six months for defying an order to open accounts in any of the 32 designated banks.

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The Home Ministry said about a year ago, it had directed all non-governmental organisations (NGOs), business entities and individuals who receive funds from abroad to open accounts in any of the 32 designated banks for higher level of transparency.

However, the latest order said that it has been observed that the associations have not yet opened their bank accounts in central government's Public Financial Management System (PFMS)-integrated banks and contravened the provisions of the Foreign Contribution (Regulation) Act 2010 by not complying with the December 2017 direction.

"Now, therefore, in exercise of the power conferred by section 13 of the FCRA, 2010, pending consideration of cancellation of their certificates, the central government hereby, suspends the registration under FCRA 2010 of the said associations (including their branches and units) for a period of one hundred and eighty days..," the latest directive said.

Suspension of the FCRA registration means the NGOs and entities cannot accept funding from abroad, an official said.

The directive to the NGOs, companies and individuals to open foreign contribution accounts in banks, which are integrated with the central PFMS, was given for a higher level of transparency and hassle-free reporting compliance.

The FCRA 2010 provides for the regulation of acceptance of the foreign funds or foreign hospitality by certain individuals, associations, organisations and companies "to ensure that such contributions or hospitality is not being utilised for the activities detrimental to the national interest", the ministry had said.

The 32 designated banks where individuals, NGOs and other entities can open their accounts are 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 Limited, City Union Bank and Syndicate Bank.

Allahabad Bank, The Jammu and Kashmir Bank Ltd, Punjab National Bank, Allahabad UP Gramin Bank, 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 and Axis Bank are the others.

The PFMS, which functions under the Controller General of Accounts in the Ministry of Finance, provides a financial management platform for all plan schemes, a database of all recipient agencies, integration with core banking solution of banks handling plan funds, integration with state treasuries and efficient and effective tracking of fund flow to the lowest level of implementation for plan scheme of the government.

It also provides information across all plan schemes or implementation agencies in the country on fund utilisation leading to better monitoring, review and decision support system to enhance public accountability in the implementation of plan schemes.

Introduction of the PFMS resulted in effectiveness and economy in public finance management through better cash management for government transparency in public expenditure and real-time information on resource availability and utilisation across schemes.

It also resulted in improved programme administration and management, reduction of float in the system, direct payment to beneficiaries and greater transparency and accountability in the use of public funds.

The Narendra Modi-led government tightened the rules for NGOs and took action against all such entities for violation of various provisions of the FCRA 2010 which include non-filing of annual returns as mandated in the law.

Last month, the Home Ministry had served show cause notice to 1,775 entities for their "failure" to submit annual income and expenditure statement on foreign funding for up to six years.

First Published:Dec 10, 2018 6:44 PM IST