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Indian companies with foreign investors who carry out Corporate Social Responsibility (CSR) programs are now being scrutinized by the government. The companies reportedly are increasing stinging activities in the grey areas among their CSR contributors.
Companies with more than 50% foreign shareholders make donations to NGOs that have obtained Foreign Contribution Regulation Act (FCRA) clearance. Organizations like Infosys, HDFC, ICICI and Hindustan Liver have started their own foundations under the CSR project.
As per a report published in ET, many companies like ICICI await clarifications from the government in this grey area. In March 2015, ICICI’s foreign shareholding was 41.23% and in the past, it crossed the foreign shareholding cap under FCRA of 50%. The bank, which spends over 2% of its profit in CSR in skills development, livelihood, health, and elementary education, does not give grants to NGOs but to its Foundation, which in turn partners with NGOs.
“ICICI Bank doesn’t invest in ICICI Foundation — it is a donation and contribution for social causes. In that perspective, we made a representation two to three years ago to the ministry of corporate affairs about not putting us under the purview of FCRA, but there has been no response,” says Chinmay Sengupta, COO, ICICI Bank Foundation.
(Source: CSR Business Insider)
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