NGOs need to open a General Account and an F.C. Account (if the organization is registered under FCR (Foreign Contributions Regulation) Act. F.C. Account: Under FCR (Foreign Contributions Regulations)Act every association is required to maintain a separate bank account which is meant for receiving & utilization of foreign donations.
Funds received from foreign sources should be deposited in the FC Account of an organization.In case funds are transferred electronically the funds should be transferred to your FC Account only.
Any unutilized balances related to grants/donations from foreign sources should be deposited back into the FC Account.
In some cases, organizations open subsidiary bank accounts for project operational convenience purpose where the operational area is located in a distance place than that of the location where the FC Account is opened.
Generally this should not be done. However, because of the above reason if it is safer than carrying cash from one place to the other, in which case all the foreign donations will have to be deposited in the FC Account. The organization may issue a cheque to be deposited in the account at project area. However, at the end of the project period or financial year, whatever money is there in this account will have to be deposited back in the F.C. Account.
Though it is advisable not to change the Bank F.C. Account, because of beyond organizational control if it has to be changed, a resolution needs to be adopted and with a copy of the minutes an application needs to be written to the Ministry of Home Affairs about the changes and that needs to be approved by the Ministry of Home Affairs (FCRA Cell).
General Account: This account is used for in-country funds. Though initially a single account is opened, when receiving funds from different don donors, at times they may ask the organizations to open separate bank accounts for their projects for convenience sake. Because of that, over a period of time the NGOs concerned will have more bank accounts opened. In such a situation, the NGO concerned should close the accounts as and when the project is over and there is little likelihood of getting further funds in the near future from that organization for that project.
Updating Pass Book:It is advised that the project should update the Pass Books as and when the transactions are made. Even if there are no transactions also, the Pass Book need to get updated at least twice in a month. The project should also get Bank Statement at the end of the month and ddo the Reconciliation. The update of Pass Books should be done for all the accounts both FC and non-FC.