SBI urges detailed rules for handling foreign-funded accounts under FCRA amendment

At a Joint Parliamentary Committee session reviewing the Foreign Contribution (Regulation) Amendment Bill, 2026, SBI senior management raised concerns about a gap between the date an organisation's registration ends and when banks are formally informed, which could expose interim transactions to scrutiny. Chairman Challa Sreenivasulu Setty and his team urged that banks receive authenticated communication before any restrictions are imposed and that prior transactions be protected.

The law ministry briefed that cancelled or surrendered registrations would temporarily transfer foreign contributions and related assets to a government-designated authority, potentially becoming permanent if registration is not restored. SBI reported that, as of August 31, it held 25,432 accounts for entities covered by the foreign funding law, of which 10,992 were dormant, frozen, suspended or otherwise restricted, holding a combined balance of Rs 165.33 crore. The bank advocated for a clear legal framework, detailed rules, and prompt updates on registration status to ensure smooth transition and avoid disruption to ongoing programmes.