MHA tells NGOs to make payment exceeding Rs 20,000 through cheque

Tightening the noose around erring foreign-funded NGOs, the government has ordered that all voluntary organisations henceforth will have to make payments exceeding Rs 20,000 through account payee cheques or drafts.

The order came weeks after the Home Ministry found that over 10,000 NGOs receiving foreign funds have failed to submit their mandatory annual returns for three consecutive years from 2009.

During the course of inspection of records and accounts of the associations registered or granted prior permission under Foreign Contribution (Regulation) Act, 2010 from time to time, the government has observed that some NGOs withdraw huge amount of foreign contribution from their foreign contribution designated bank accounts and utilisation accounts by cash.

The issue of fixing an upper limit for incurring expenditure by association registered or granted prior permission under the FCRA by cash from foreign contribution designated bank accounts and utilisation accounts has been under consideration of the government for some time.

"The government after considering the issue, advises all FCRA associations that items of expenditure/ payments amounting to Rs 20,000 or more should be done by cheque/ demand drafts," a circular issued by Joint Secretary in the Home Ministry G K Dwivedi said.

The Home Ministry has already made it clear that the records and accounts of NGOs indulging in cash payments of Rs 20,000 or more from foreign contribution designated accounts or utilisation accounts are likely to require more intensive scrutiny by government.