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Donations from NRIs - FCRA or NOT? That is the question

Donation from NRI:

Many NGOs do not want an international payment gateway because they don’t have FCRA. Unfortunately, this demonstrates the poor understanding of the FCRA law and how payment gateways work.

An international gateway is one that accepts credit/debit cards issued in countries outside India. It has NOTHING to do with citizenship of a person and thus FCRA. So, who would donate from outside India and how should you classify their donation:

1. Non-Resident Indian (NRI) – Indian Donor Bank Account

An NRI is an Indian citizen who is ordinarily residing outside India and holds an Indian Passport. i.e he’s still a citizen of India.

This is well-settled through the FAQs on the FCRA website (

“Q.8 Whether donation given by Non-Resident Indians (NRIs) is treated as ‘foreign


Ans. Contributions made by a citizen of India living in another country (i.e., Non-Resident Indian), from his personal savings, through the normal banking channels, is not treated as foreign contribution. However, while accepting any donations from such NRI, it is advisable to obtain his passport details to ascertain that he/she is actually an Indian citizen.”

2. Person from Indian Origin (PIO) or Overseas Citizen of India (OCI) – FCRA Bank Account

PIO & OCIs are presently holding another country’s citizenship/ nationality i.e. he/she is holding foreign passport.

Again, well-settled through FCRA FAQs

“Q.9 Whether donation given by an individual of Indian origin and having foreign

nationality is treated as ‘foreign contribution’?

Ans. Yes. Donation from an Indian origin person who has acquired foreign citizenship is treated as foreign contribution. This will also apply to PIO / OCI cardholders. However, this will not apply to 'Non-resident Indians', who still hold Indian citizenship and they are not foreigners.”

If the donor is a POI/OCI, then the donation will be considered as a foreign contribution. Even if such donations were to originate from a bank account in India, such donation must be received in foreign bank account only since it is considered as a foreign contribution from foreign source.

3. Foreign Nationals – FCRA Bank Account

Individuals who are citizens of a foreign country,

The law on this is also very clear. as per the provisions of section 2(1) (j) of FCRA, 2010, a ‘foreign source’ includes:-

…. (x) a citizen of a foreign country;

Donations will have to be received directly in designated FCRA bank account if it is given by persons that falls under the definition of ‘foreign source’.

So, do remember that you can have an international payment gateway even if you don’t have FCRA – it is in fact much needed in order to obtain donations from outside India. You just need to establish the nationality of the donor to be India.

P.S. - It is advisable as a best practice to obtain proof of citizenship of donors contributing from outside of India (both NRIs & foreign citizens) while accepting donations. In most cases, passports are conclusive enough proofs of the same.

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