Industry Odisha Bureau, Sep 30: SBI wants clear rules for bank accounts of organisations with suspended FCRA registration. Frozen accounts, fixed deposits and interest remain open questions. A parliamentary panel is examining the FCRA bill.
Legal status can change quickly. A bank account, however, needs precise instructions before anything changes. That gap sits at the heart of SBI’s questions on the new FCRA bill.
The FCRA governs how organisations in India receive foreign contributions. The State Bank of India has now sought clarity on suspended registrations. It wants to know how affected accounts and deposits should be handled.
Freeze, restrict or continue?
SBI’s first question is basic but important. Should an affected account be frozen, or keep running under restrictions?
The two are not the same. A frozen account generally suggests operations stop. A restricted account can imply some limited activity continues. What activity might be allowed has not been spelt out.
SBI also asked what happens once control passes to the designated authority. Who would actually operate the accounts then? And could fresh receipts still be credited?
Deposits complicate the picture
Money in such accounts is not always sitting idle. Existing balances need clear treatment. Some funds may be held in fixed deposits. Those deposits also earn interest over time.
SBI sought clarity on how both deposits and interest should be handled. These questions show that implementation involves more than a simple freeze.
The notification gap
SBI also flagged a potential timing gap. An organisation’s registration may cease before the bank receives authenticated communication. During that interval, the bank could process transactions unaware of the change.
SBI has sought protection for transactions processed in this interim period. The bank described this as a potential gap in the system.
SBI’s FCRA footprint
The scale of SBI’s FCRA business explains its caution. Its New Delhi Main Branch alone holds 25,432 FCRA accounts. Of these, 14,440, or 57%, are active. Another 10,992, or 43%, are restricted. SBI’s presentation separately referred to 24,915 designated accounts.
The remittance pipeline
Large volumes of foreign money also flow through SBI. The bank received 88,409 remittances worth ₹23,912 crore last year. This year, up to August 31, it received 33,397 remittances. These were worth ₹9,263.12 crore. The second figure covers only part of the year.
Smaller groups at risk
SBI also highlighted a risk for smaller and rural organisations. Such groups, it said, could lose access to funds after missing renewal deadlines.
Parliament examines the framework
The Joint Parliamentary Committee (JPC) is examining the FCRA Amendment Bill, 2026. SBI officials, led by Chairman Challa Sreenivasulu Setty, briefed the committee. Legislative Secretary Rajiv Mani, who also holds charge as Law Secretary, briefed it too.
The Law Ministry says the proposed framework strengthens accountability. Mani explained the reasoning behind provisions on foreign-funded assets.
Rules will decide the details
The FCRA bill provides for government control of foreign contributions and assets. Detailed banking procedures, however, would be set through rules. The law sets the direction, while rules decide daily execution.
SBI’s questions sit squarely in that second layer. Those rules will shape what happens inside each affected bank account.
