Section 17 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Since the Amendment Act, 2020 every certificate or prior-permission holder must receive foreign contribution only in an account designated as an "FCRA Account", opened in a branch of the State Bank of India at New Delhi that the Central Government specifies by notification. The holder may then move the money to further accounts in scheduled banks for keeping and using it. Banks must report the remittances.
This article reads section 17 as per the section substituted by paragraph 12 of the Foreign Contribution (Regulation) Amendment Act, 2020 (33 of 2020); the section as enacted, which spoke of a single account in a chosen bank branch, is no longer the law and is mentioned only to show the change. Later amendments should be checked.
A person granted a certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as "FCRA Account" by the bank, opened for remittances in such branch of the State Bank of India at New Delhi as the Central Government may, by notification, specify. The holder may open another FCRA Account and other utilisation accounts in scheduled banks of his choice. No funds other than foreign contribution may be received or deposited in any such account. Banks report the remittances.
Section 17(1): the FCRA Account
Paragraph 12 of the Amendment Act, 2020 substituted this sub-section: "Every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as 'FCRA Account' by the bank, which shall be opened by him for the purpose of remittances of foreign contribution in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify in this behalf".
Four elements are in that sentence.
- Who: every person granted a certificate or prior permission under section 12.
- The restriction: foreign contribution "only" in the account; the section gives no alternative route for receipt. Our books of accounts and compliance service can set up the ledger structure for it.
- The account: one designated by the bank as an "FCRA Account".
- Where: a branch of the State Bank of India at New Delhi, "as the Central Government may, by notification, specify". The section leaves the branch to notification. The notification is not in the texts consulted, and this article does not name a branch.
Section 12(1A) requires an applicant to open an FCRA Account in the manner specified in section 17 and give its details in the application; see the article on section 12. The rules on the account, including rule 9, are explained in the article on rule 9; this article does not state what the rule says.
The three provisos
- First proviso: the person "may also open another 'FCRA Account' in any of the scheduled bank of his choice for the purpose of keeping or utilising the foreign contribution which has been received from his 'FCRA Account' in the specified branch of State Bank of India at New Delhi".
- Second proviso: the person "may also open one or more accounts in one or more scheduled banks of his choice to which he may transfer for utilising any foreign contribution received by him in his 'FCRA Account' in the specified branch" of the State Bank of India at New Delhi "or kept by him in another 'FCRA Account' in a scheduled bank of his choice".
- Third (the words are "Provided also"): "no funds other than foreign contribution shall be received or deposited in any such account."
"Scheduled bank" is defined in section 2(1)(s); see the article on the definitions in section 2. The structure that results has up to three layers:
| Layer | Account | Purpose |
|---|---|---|
| 1 | FCRA Account in the specified State Bank of India branch at New Delhi | Receipt of foreign contribution |
| 2 | Another FCRA Account in a scheduled bank of the holder's choice | Keeping or utilising money received from the layer 1 account |
| 3 | One or more accounts in scheduled banks of the holder's choice | Transfers for utilising money from layer 1 or layer 2 |
The third proviso applies to every such account. A holder who lets an office-expense reimbursement, a local donation or a fee receipt pass through an account in the scheme breaks it on the words of the proviso. Interest on the deposit is a different matter: Explanation 2 to section 2(1)(h) makes interest accrued on foreign contribution deposited in a bank referred to in section 17(1), and other income derived from it, foreign contribution as well; see the article on foreign contribution. The proviso's words "no funds other than foreign contribution" therefore have to be read with that Explanation. Take advice on how interest is to be treated in your accounts.
Section 17(2): reporting by banks
"The specified branch of the State Bank of India at New Delhi or the branch of the scheduled bank where the person referred to in sub-section (1) has opened his foreign contribution account or the authorised person in foreign exchange, shall report to such authority as may be specified, (a) the prescribed amount of foreign remittance; (b) the source and manner in which the foreign remittance was received; and (c) other particulars, in such form and manner as may be prescribed."
The duty to report falls on the bank branch or the authorised person in foreign exchange, not on the account holder. The rule that deals with it is rule 16, explained in the article on rule 16 on reporting by banks; this article does not state what it says. The authority "as may be specified" is not named in the texts consulted.
What changed from the enacted section
| As enacted | After the 2020 Amendment Act |
|---|---|
| Receipt "in a single account only" through one branch of a bank the person specified in his application for a certificate | Receipt only in an account designated "FCRA Account", opened in such branch of the State Bank of India at New Delhi as the Central Government notifies |
| One or more accounts in one or more banks for utilising the foreign contribution received | Another FCRA Account, and one or more other accounts, in scheduled banks of the holder's choice, as in the provisos |
| No funds other than foreign contribution in such account or accounts | The same rule, in the third proviso |
| Every bank or authorised person in foreign exchange reports to the specified authority | The specified State Bank of India branch, the branch of the scheduled bank where the account is opened, or the authorised person in foreign exchange reports |
Control of the account is also an accounts question. A trust that runs three layers of accounts needs a clear ledger for each, and the annual accounts and returns depend on them; see the article on sections 18 to 20. Example (invented). Bharat Shiksha Trust, which holds a certificate, receives a remittance in its FCRA Account in the specified State Bank of India branch. It then moves part of the money to a second account in a scheduled bank of its choice to pay salaries of the project staff. The trust must keep the third proviso in mind: it must not deposit the staff's reimbursements for personal expenses or a local grant into that second account.
Need help with FCRA account structure and ledgers?
The account structure drives your annual accounts, your audit trail and your returns. Our books of accounts and compliance team can map each account to a ledger so that receipts, transfers and utilisation can be traced.
Key takeaways
- Section 17, as substituted in 2020, requires receipt of foreign contribution only in an "FCRA Account" in a State Bank of India branch at New Delhi specified by notification.
- The branch is not named in the texts consulted.
- The holder may open another FCRA Account and further utilisation accounts in scheduled banks of his choice.
- No funds other than foreign contribution may be received or deposited in any such account.
- The bank branch or authorised person reports remittances to the specified authority under section 17(2).
Read next
- Section 12: application, grant, refusal and validity
- Sections 18 to 20: intimation, accounts and audit
- Section 7: foreign contribution not to be transferred
- Rule 16: reporting by banks
Disclaimer: Based on the Foreign Contribution (Regulation) Act, 2010 as enacted, read with the Amendment Act, 2020 and the other amendments named in this article, and on the Foreign Contribution (Regulation) Rules, 2011 as amended by the notifications named (latest consulted: S.O. 3272(E) dated 22 June 2026), as consulted on 2 October 2026. No consolidated official text was available; some provisions rest on a third-party copy and are identified as such. Later amendments, notifications and Ministry of Home Affairs orders should be checked. This article is general information, not legal advice; check the official text before acting.