Para 3.2(1) — This para prescribes safeguards for cheque issuanc
Original Rule Text
3.2.2 After the Appropriation Act has been passed by the Parliament and assented to by the President, the Budget section/Finance Wing communicates the budget allotment. On the basis of the budget allotment communicated by the Finance Division, the Head of the Department will make distribution of the allotment among the DDOs under his control, through the concerned PAO. On the basis of the allotments and cash requirements for disbursal of pay and allowances, travelling allowances, contingencies etc. intimated by the CDDOs, the PAO will determine the amount of assignment for every quarter of the financial year. For determining the assignment of each quarter, the PAO will take into account the anticipated drawals on account of advances from GPF for which DDOs are authorised to issue electronic payment. The Pay and Accounts Officer will authorise the paying branch of the bank by means of a Letter of Credit(LoC), to make payment of cheques drawn from time to time or electronic payments by the concerned DDO during the said quarter, not exceeding the limit specified in the LoC. While issuing the LoC for the first quarter of the financial year after the Appropriation Act is passed, the PAO will take into account the LoC issued earlier on the basis of the "Vote on Account". 3.2.3 The paying branch is responsible to ensure that at no time the amount assigned in the LoC is exceeded on account of the payment of any electronic payment or cheque issued by the CDDO. Except in respect of the first quarter where allocation on the basis of Vote on Account is involved, the fresh LoC issued after expiry of the period prescribed in the earlier letter of credit shall be treated as an addition to the unspent balance of the earlier letter of credit. The Pay and Accounts Officers while communicating the assignment for the second and subsequent quarters should indicate not only the amount assigned for that quarter, but also the progressive total of assignments upto the end of the quarter. This will enable the bank to ensure that the total cumulative drawals from the beginning of the year do not exceed the total progressive assignments. The unspent assignment of the last quarter of the financial year is not to be carried forward to the next year. 3.2.4 The cheques and electronic payments actually issued during the last quarter but presented for payment during the next quarter in the subsequent financial year, will be taken by the banks against the assignment of the year in which they were drawn, and not the year in which they are paid. 3.2.5 PAO shall reconcile the progressive expenditure of CDDOs from the payment scrolls, on a weekly basis. In case of payment made through PFMS also, weekly reconciliation must be conducted to ensure that limits as specified in LoC are not exceeded. If LoC are found to be exceeded, then PAO shall immediately inform his DCA/CA/CCA for taking up the matter with the concerned bank. 3.2.6 The CDDOs are required to keep a close watch over the drawals made by them and should take prompt action for assignment of additional funds by PAO, through the renewal of the LoC. The system of quarterly allotment will apply to disbursing officers functioning on Public Works Division pattern also. 3.2.7 The CDDO in whose favour an assignment account has been opened in the accredited bank, shall in no case draw any amount for placing in a separate account in the bank or in a private account. It is also not permissible to draw cheques and deposit the amount in the department's cash chest at the end of the year for the purpose of showing the full amount of the assignment as utilized. (Below Para 3.5 (2) of Subsidiary Instructions to R&P Rules,2022). 3.2.8 The procedure prescribed in paragraphs 4.1 and 4.2 of Chapter 4 regarding the sending of specimen signature, provision for different categories of cheques and the procedure for obtaining bank drafts will apply to CDDOs also.
Note: Detailed instructions contained in para 3.2 of Subsidiary Instructions to R&P Rules, 2022 regarding use of cheques may also be referred to.
What This Means
This para prescribes safeguards for cheque issuance by Cheque Drawing DDOs. All cheques drawn by CDDOs must be crossed (meaning they can only be deposited into a bank account, not cashed over the counter). Cheques must be signed only in indelible ink. For Category 'A' cheques (negotiable ones), the payee's bank account number and bank/branch details must be written after the payee's name. Most importantly, any cheque or electronic payment of Rs 10 lakh or above must carry two signatures or digital signatures. The Head of Accounting Organization nominates a second signatory - another gazetted officer or the senior-most non-gazetted officer - for this purpose.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1All CDDO cheques must be crossed - no uncrossed cheques are permitted
- 2Cheques must be signed only in indelible ink
- 3Category 'A' cheques must include the payee's bank account number and bank/branch details
- 4Cheques and e-payments of Rs 10 lakh and above require two signatures/digital signatures
- 5The second signatory is nominated by the Head of Accounting Organization, preferably a gazetted officer
Practical Example
A CDDO needs to issue a cheque for Rs 15 lakh to a contractor for office renovation. Since the amount exceeds Rs 10 lakh, the CDDO signs the cheque in indelible ink and then has the nominated second signatory (a gazetted officer designated by the Pr.CCA) also sign it. The cheque is crossed and marked with the contractor's bank account number and bank branch details. Without the second signature, the bank would refuse to honour the cheque.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why must all CDDO cheques be crossed?▼
When is a second signature required on cheques?▼
Who serves as the second signatory?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.