Co-mingling

When an NPO raises money on a Social Stock Exchange for a specific purpose, that money is not supposed to disappear into the organisation's general accounts. If it is not yet spent, it has to stay visibly separate. Mixing it with other funds is called co-mingling, and the workbook prohibits it outright.

The workbook's own words: "The unutilised amount shall be kept in a separate bank account and shall not be co-mingled with other funds."

This is not a vague best-practice suggestion. It is one line in a numbered regulatory requirement, sitting directly under the rules for how an NPO must report what it did with the money it raised.

The no-co-mingling rule sits inside Regulation 91F of the SEBI LODR Regulations, on the Statement of Utilisation of Funds (section 9.2.5):

1. A listed NPO must submit, quarterly, a statement showing: the category-wise amount of money raised, the category-wise amount utilised, and the balance remaining unutilised.
2. The unutilised balance must sit in a separate bank account, and must not be co-mingled with other funds.
3. These quarterly statements continue until the issue proceeds have been fully utilised, or the purpose for which they were raised has been achieved.

The rule works together with the reporting requirement: a separate bank account makes the "unutilised amount" reported each quarter independently verifiable — a fund reviewer, or the Social Stock Exchange itself, can check the account balance directly, rather than relying only on the NPO's own internal bookkeeping to say how much of the raised money is still unspent.

Illustrative figures.

Nirmal Jal NPO lists a Zero Coupon Zero Principal issue raising ₹90 lakh for a specific borewell-recharge project. By the end of the first quarter, it has spent ₹32 lakh and has ₹58 lakh still unutilised.

If Nirmal Jal deposited the ₹58 lakh into its general account and later used part of it to cover unrelated administrative costs before the borewell project needed it, that would be co-mingling — and a breach of the Regulation 91F requirement, regardless of whether the money was eventually replaced.

Chapter 9, section 9.2.5 (Statement of Utilisation of funds in terms of Regulation 91F of the LODR Regulations), states the no-co-mingling rule as point 2 of a three-point requirement. Expect a question on what must be done with unutilised funds (kept in a separate bank account) and how often the utilisation statement is filed (quarterly).

• The requirement is quarterly reporting, continuing until funds are fully utilised or the purpose achieved — not a one-time statement at the time of raising the funds.
• "Co-mingled" specifically means mixed with other funds — the rule is violated the moment unutilised issue proceeds sit in a shared account, even before any of that money is actually misused.
• This rule applies to listed NPOs' unutilised issue proceeds under Regulation 91F — it is a fund-segregation rule, not a general accounting standard applied to every NPO transaction.
• Do not confuse this with the corpus donation requirement to invest donations in specified investments — that is about how donated corpus money must be deployed; co-mingling is about keeping unutilised issue proceeds in a dedicated, separate bank account.