Para 4.1 — CAM
Original Rule Text
4.1 INTRODUCTION
4.1.1 Under the departmentalized accounting system, the receipts and payments of each Ministry/Department of the Government of India are handled by the RBI or the Public/Private Sector Bank/s nominated for the particular Ministry/Department by the RBI on the advice of the CGA, in accordance with the memorandum of instructions issued by RBI to Banks (APPENDIX 4.1), and subsequent orders in this regard. If a Ministry/Department requires to change their accredited bank branch or accredit additional branches of the same agency bank, the Head of the concerned Accounting Organisation of the Ministry/Department may directly approach the accredited bank under intimation to RBI, DGBA, Central Office and RBI, CAS, Nagpur as also Office of the CGA. Immediately on commencement of Government business at such branches, the concerned bank will intimate RBI, Central Office, DGBA and RBI, CAS, Nagpur. The revised procedure will be applicable only in cases where change of FPB is not involved. In case, where a new branch is being identified as Focal Point Branch/Nodal branch or any change of existing FPB in involved, the Ministry/Department will have to seek prior permission of RBI, DGBA, Central Office. Prior permission will also be required in cases where the new accredited branch is to report transaction to RBI, CAS, Nagpur directly without intervention of an FPB. Accordingly, a new bank for a particular Ministry/Department requires prior approval of CGA and RBI. These instructions are applicable to all Civil and non-Civil Ministries/Departments of Government of India.
(Authority: O/o the CGA’s OM No. S-11012/1(31)/AC/2005/RBD/Vol. III/602 dated 9th May 2006)
Note: Implementation of CTS 2010 Standard: With a view to enhancing in cheque clearing, RBI introduced Cheque Truncation System (CTS) for clearance of cheques, facilitating the presentation and payment of cheques without their physical movement. RBI in consultation with the office of CGA, decided to dispense with the requirement of forwarding the paid Central Government cheques in physical form to the Government departments. Accordingly, RBI vide their Circular DGBA GAD NO.2036/42.01.035/2015-16 dated 31st December, 2015 amended “Memorandum of Instructions issued to agency banks for conducting government business” to discontinue the ‘Paper to Flow (P2F’ system with effect from 1st February, 2016 in line with implementation of full-fledged CTS 2010. This circular has been made as an addendum to the instructions and inserted as Annexure 15 of the Memorandum of Instructions (APPENDIX 4.1).
4.1.2 The Pay and Accounts Officer will send to the branch with which he is placed in account, the specimen signature of the Pay and Accounts Officer/ Officers who are authorised to sign as second signatory in terms of OM NO.1 (3)/95/TA/Pt. file/575 dated 27-7-98. An independent officer, preferably higher in rank and whose signature is available with the bank, should duly countersign the specimen signature of the Pay and Accounts Officer authorized to sign cheques. When there is a change in the incumbency of any of the officers authorised to sign the cheques, the branch concerned should be duly informed in writing and the specimen signature of the incumbent officer should be attested and forwarded to the bank in the same manner.
What This Means
This para introduces the banking arrangements for departmentalized accounting. Each Ministry/Department's receipts and payments are handled by banks nominated by RBI on the advice of the CGA. To change or add an accredited bank branch within the same bank, the Head of Accounting Organization can approach the bank directly (with intimation to RBI and CGA), but changing the Focal Point Branch or getting a new bank requires prior RBI/CGA approval. PAOs must send specimen signatures to the accredited bank, update them on incumbency changes, and maintain cheque book supply. The Cheque Truncation System (CTS 2010) eliminated the need for physical cheque forwarding to government departments since February 2016. PAOs also open two e-FPB accounts in RBI for BharatKosh receipts and IAAA e-payments exceeding Rs 100 crore.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Banks for each Ministry/Department are nominated by RBI on the advice of the CGA under the departmentalized system
- 2Changing accredited branch (same bank, no FPB change) can be done directly by the Head of Accounting Organization
- 3Changing the Focal Point Branch or appointing a new bank requires prior approval from RBI DGBA and CGA
- 4CTS 2010 eliminated physical cheque forwarding ('Paper to Flow') since February 2016
- 5PAOs open two e-FPB accounts in RBI: one for BharatKosh receipts and one for IAAA e-payments above Rs 100 crore
Practical Example
A Ministry's PAO needs to change the accredited bank branch because the current branch is being relocated. Since the change is within the same bank and does not involve the Focal Point Branch, the Head of Accounting Organization (Pr.CCA) writes directly to the bank, with copies to RBI DGBA, RBI CAS Nagpur, and the CGA office. The new branch starts government business and intimates RBI Central Office. The PAO then sends the specimen signatures of authorized officers to the new branch and notifies them of the cheque book numbers in use. For high-value payments like a Rs 150 crore PSU subsidy, the PAO uses the IAAA e-FPB account where RBI directly processes the e-payment.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can a Ministry change its accredited bank branch on its own?▼
What is the Cheque Truncation System (CTS)?▼
What are e-FPB accounts used for?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.