Verghese V Joseph-
In response to the Foreign Contribution (Regulation) Amendment Bill, 2026 that was tabled in Parliament last week, the Catholic Bishops’ Conference of India (CBCI) has issued two pointed memoranda dated March 31, 2026—one addressed to Union Home Minister Amit Shah and another to all Members of Parliament—voicing profound alarm over the move.
These documents, marked as Protocol No. 62 from the CBCI Centre in New Delhi and signed by Secretary General Archbishop Anil J.T. Couto, represent a rare, direct institutional intervention by India’s apex Catholic body, framing the Bill as a threat to constitutional rights, civil society autonomy, and the Church’s longstanding social-service mission.
Key Provisions Under CBCI Scrutiny
The memoranda meticulously dissect the Bill’s novel mechanisms, particularly the introduction of Section 14B, which deems an FCRA registration “ceased” if renewal is not filed on time, if an application is refused, or if the certificate lapses before renewal. This “deemed cessation” triggers provisional vesting of all foreign contributions and assets—wholly or even partly funded by them—into a government-appointed “Designated Authority,” as outlined in the proposed new Chapter IIIB replacing Section 15.
The CBCI highlights that this extends beyond existing cancellation (Section 14) or surrender (Section 14A) scenarios to include routine renewal delays, a process it describes as entirely controlled by the Ministry of Home Affairs (MHA) without communicating deficiencies or allowing representations. Assets, including places of worship, schools, hospitals, and orphanages, would vest regardless of whether they were created partly from domestic funds, raising fears of disproportionate expropriation for administrative lapses rather than proven violations.
Constitutional Red Flags Raised
Invoking Article 300A (right to property), the CBCI argues that asset vesting without prior judicial determination violates due process and proportionality, depriving organisations of lawfully acquired properties built over decades of compliant service. Articles 25 and 26 (religious freedom and denominational autonomy) are also cited, with the bishops decrying “undue interference” in faith-based institutions’ management, especially since limited protections apply only to places of worship while charitable and educational assets face full vesting.
The documents note that FCRA renewals every five years—2016, 2021, and now 2026—implicitly affirm no violations up to that point, making post-renewal denial and seizure punitive for past valid uses. Personal liability extensions to trustees and office-bearers are lambasted as reversing “innocent until proven guilty,” deterring voluntary leadership in nonprofits.
Impact on Catholic Social Services
The CBCI underscores the Church’s pivotal role in nation-building: educating children, healing the sick, sheltering the homeless, and uplifting Dalits, tribals, and rural poor through blended domestic-foreign funding. Thousands of Catholic schools, hospitals, and outreach centres—often in remote areas—risk disruption, with the “greatest impact” falling on millions of vulnerable beneficiaries rather than the institutions themselves.
The memoranda warn that the Bill’s broad vesting clause could seize assets partly funded abroad, even if mostly domestic, undermining a “shared partnership” between State and civil society. This echoes broader Church concerns about foreign-donor hesitancy amid regulatory uncertainty, potentially halting scholarships, healthcare, and relief for the marginalised.
Call for Safeguards and Alternatives
The bishops urge referral to a Parliamentary Standing Committee for consultations, ensuring administrative delays do not trigger seizures, and mandating judicial oversight before vesting. They advocate an independent appellate authority, transparency in renewal processes, and protections for charitable autonomy, promoting “regulation based on proportionality and trust” over “excessive control.”
While acknowledging the need to curb misuse, the CBCI insists vesting should be narrowly tailored to proven violations, not routine lapses, preserving India’s pluralistic service spirit. The memoranda conclude that such measures must “enable, rather than hinder,” civil society’s contributions.
Broader Church and Public Echoes
These exclusive documents align with CBCI’s earlier statements flagging “dangerous” overreach into minority institutions. Regional bishops’ councils are auditing FCRA compliance, while ecumenical coalitions with other faiths are forming to lobby MPs. Opposition voices amplify the critique, but the CBCI maintains a constitutional focus, avoiding partisanship.
The memoranda signal readiness for legal challenges, with lawyers preparing arguments on property rights and religious autonomy. As Parliament debates, these papers position the CBCI as a defender of balanced regulation, protecting both accountability and India’s charitable legacy.
Inflow of foreign remittances and their specific utilization under FCRA Act are very stringent. It is therefore very necessary to understand with the help of a finance expert, preferably a chartered accountant FCRA compliance requirement, to avoid being penalised. It is admitted the current norms are very strict and goof-up may be disastrous leading to cancellation of FCRA registration.
The first and foremost, is to clearly understand the demarcation of FCRA remittances. 20% of such remittances can be used for administrative expenses (salaries, rent, etc). The balance 80% has to be utilized on project expenses.
Auditor Responsibility: Statutory auditors now hold additional responsibility to certify whether the institution has violated any FCRA provisions, requiring detailed reporting of any violations.
As of early 2026, the Foreign Contribution (Regulation) Act (FCRA) forms for the utilization of foreign remittances by Indian NGOs are largely centered around electronic filing on the
FCRA online portal, with mandatory reporting on utilization and asset creation. The primary form for reporting the utilization of foreign contributions is Form FC-4.
Here are the latest FCRA forms and key compliance requirements:
Key Forms for Utilization and Reporting
Form FC-4 (Annual Return): This is the most crucial form for reporting the receipt and utilization of foreign funds for the financial year ending March 31st. It must be filed by December 31st each year. It requires:
Detailed, purpose-wise utilization of foreign contributions (social, cultural, educational, economic, religious).
Details of administrative expenses (capped at 20% of foreign contributions).
Statement of Receipts and Payments, Income and Expenditure, and a Balance Sheet certified by a Chartered Accountant.
A ‘Nil’ return is mandatory if no foreign contribution is received or utilized.
Form FC-6A to 6E (Intimations): These forms are used to intimate various changes to the Ministry of Home Affairs (MHA), such as changes in key members (6E), or changing the designated utilization bank account (6C, 6D).
Form FC-6D (Additional Bank Accounts): Used specifically for intimating the opening of additional bank accounts for the utilization of foreign contributions.
Major 2024-2025 Updates Affecting Utilization
Carry Forward of Admin Expenses: Amendments effective from Jan 1, 2025, allow organizations to carry forward unspent administrative expenses (within the 20% cap) to the next financial year.
Key Compliance Rules (2025-2026)
Designated Bank Account: All foreign remittances must be received in the designated FCRA account at the State Bank of India, New Delhi Main Branch, and can only be transferred to other accounts for utilization.
Asset Management: Detailed reporting of assets (movable and immovable) created or acquired out of foreign contributions is required in Form FC-4.
Suspended/Cancelled Registration: If an organization’s FCRA registration is suspended or cancelled, they cannot utilize foreign contributions without prior approval.
Proposed Changes (FCRA Amendment Bill, 2026)
Designated Authority for Assets: A 2026 amendment bill proposes a “Designated Authority” to take over, manage, or dispose of assets created out of foreign funds if registration is cancelled, surrendered, or deemed to have ceased.
Automatic Cessation: The bill introduces “automatic cessation” of registration if renewal is not applied for or refused, preventing the utilization of funds.
Reduced Penalty: The maximum imprisonment for offences is proposed to be reduced from five years to one year.
However, the Union Government has deferred the passage of the contentious FCRA Bill 2026 in the Lok Sabha. The move is seen to be driven by concerns over potential backlash from electorally significant Christian community in poll-bound Kerala. Ref. report 02.04.2026 in the Telegraph Calcutta link: https://www.telegraphindia.com/india/modi-government-defers-passage-of-the-contentious-fcra-bill-in-lok-sabha-prnt/cid/2154269
Many leading NGOs do not keep any assets (example real estates, land, etc) out of FCRA remittances. If the FCRA norms are properly followed as per 80:20 stipulation (80% on project expenses, and 20% on administrative expenses), I do not see how real estates can be bought out of these funds. So, the fear of Assets takeover under the new proposed bill, is largely unfounded.