The proposed amendments to the Foreign Contribution (Regulation) Act (FCRA) came under scrutiny during deliberations before a Joint Parliamentary Committee (JPC). On 29 September 2026, the Union government defended the Bill, arguing that it strengthens the existing legal framework by enhancing legal certainty, administrative efficiency, and accountability in the management of foreign-funded assets. According to the government, the current FCRA framework provides for the vesting of assets but lacks clarity regarding the nature, duration, and finality of such vesting, resulting in an open-ended custodial arrangement and administrative difficulties in managing assets belonging to organisations whose permission to receive foreign contributions has ended.
During the discussions, the State Bank of India (SBI), the designated FCRA bank, supported the objectives of the Bill but raised several operational concerns. SBI reportedly noted that the proposed provisions do not clearly specify how frozen accounts would be managed, who would authorise payments, and how assets and funds would be handled when an organisation’s FCRA registration is suspended or cancelled. The bank also warned that smaller and rural associations could lose immediate control over funds and that ongoing programmes may be disrupted during the vesting process. SBI further called for detailed procedures, legal safeguards for banks acting on government instructions, and timely communication regarding changes in registration status. The proposed amendments also triggered debate among parliamentarians. Opposition members reportedly questioned whether provisions allowing the government to take control of assets could affect constitutional protections relating to property rights, while supporters argued that similar asset-management provisions exist in laws governing trusts and societies.
The discussions highlight continuing concerns about the practical and legal implications of FCRA regulation for civil society organisations that depend on foreign funding. The proposed amendments have implications for thousands of civil society organisations that receive foreign contributions under the FCRA. By affecting how foreign-funded assets and accounts are managed when registrations are suspended or cancelled, the amendments may influence organisations’ financial stability, programme continuity, and ability to deliver services. At a systemic level, the amendments may further shape India’s overall regulatory approach to foreign funding and civic space. If the concerns raised by SBI and other stakeholders are not addressed, the changes could contribute to a more restrictive operating environment for some civil society organisations.