Para 4.1 — This para introduces the banking arrangements for

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.

4.1.3 The Principal Accounts Office will obtain supply of cheque books required for use by the PAOs from the Central Stamp Store, ISP, Nasik Road or the accredited bank concerned wherever so authorized by the CGA, and make arrangements for their distribution to the PAOs. The detailed procedure in this regard as prescribed in Government of India, Ministry of

Finance (Department of Expenditure) OM No. F.2 (12)/76-sc/1490-1503 dated the 16th August, 1976 wherever applicable, will apply even in cases where cheque books have been authorized to be obtained from the accredited banks directly (APPENDIX 4.2).

4.1.4 The name of the Min./Deptt. of the Govt. of India, the name of the station, name of the office/ name and branch of the bank may be got printed on cheques and the designation of the officer/officers signing cheques, DDO and bank code number etc. may be affixed by means of rubber stamps on the cheque foils.

4.1.5 The officer authorised to sign cheques will intimate to the paying branch of the bank the number of the cheque book and the number of the cheque forms included therein whenever a new cheque book is brought into use. The bank will keep a record of these particulars for verifying the genuineness of the cheques presented.

4.1.6 In case of a Pay and Accounts Officer going on leave, a substitute/link officer is to be normally arranged by the Head of Accounting Organization. If, however, it is not administratively convenient to post a substitute for short spells of leave and another Pay and Accounts Officer is available in that office, that Pay and Accounts Officer can be authorised to sign the cheques or e-payment advices. If another Pay and Accounts Officer is not available on the strength of that office, the Pay and Accounts Officer going on leave has to ensure that no payments of important nature are pending. If stationed locally, cheques of urgent nature can be signed by the Pay and Accounts Officer even at his residence, but in those cases where the Pay and Accounts Officer goes out of station and nosubstitute can be arranged in his place and there is need for making arrangements for drawal of cheques, the Principal Accounts Office may authorise the senior most AAO to sign cheques or e-payment advices for the specified period of the absence of the Pay and Accounts Officer. The bills passed and cheques issued duringthe period of absence of Pay and Accounts Officer should be reviewed by the regular incumbent after his return or by the fulltime substitute posted in his place. A certificate in this regard should be sent by the Pay and Accounts Officer to the Principal Accounts Office that the bills passed/cheques/e-payment advices issued during the period of his leave/leave of his predecessor have been checked.

4.1.7 In addition to the bank accounts in the accredited bank of the Ministries/Departments, PAOs of civil Ministries/Departments are also required to open two e-FPB accounts in RBI i.e. one for receipts under BHARATKOSH Portal and one for e-payments through Inter Accountal Adjustment Advice (IAAA). PAOs operate IAAA where RBI makes e-payments for amounts exceeding ₹100 crore, directly to PSUs/Other Parties etc. and RBI will send e-scrolls for such payments to PAOs. PAOs need to send the request for account opening requests to the Regional Director, RBI, Mumbai. (Authority: S-11012/1(12)/HLM/2012/RBD/1414-1460 dated 22.8.2016).

What This Means

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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

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Frequently Asked Questions

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