Para 4.2.3 — CAM
Original Rule Text
4.2.3 Categories of cheques and their use
4.2.3.1 Category ‘A’ Cheque (NEGOTIABLE) - These are to be used for payments, if so needed, on account of personal claims to gazetted officers, to contractors and suppliers and to public sector companies, corporations etc. Negotiable cheques will be drawn as payable to or order of the 'Payee'. However, use of Category A cheques may arise only occasionally as all these payments are now required to be made electronically. While writing cheques of this category name of the payee should be followed by his bank account numberand name of bank/branch. As a safeguard against fraudulent payment all non-salary cheques in excess of ₹ 500 and salary cheques in excess of ₹ 1000 should be crossed and marked 'Account Payee'.
4.2.3.2 Acquittance for the payments made in cash to the Government servants shall be obtained as specified in the Rule 14(6) and Para 2.9(1) of Subsidiary Instructions to R&P Rules, 2022. In case of payment credited directly to the bank account of the officers or staff, no formal acquittance is to be obtained from the officers or staff.
4.2.3.3 Category ‘B’ Cheque (NON-TRANSFERABLE)- These are meant for payment to the payee who is a Government officer for disbursement of salaries etc. and payments pertaining to office establishment and office contingencies. These cheques will be drawn in favour of the payee by his official designation and will contain the superscription 'Not Transferable' on the top and will be drawn as payable to the payee only and not 'to order'. These cheques are not negotiable and payments will be made only to the payee or to his messenger holding a letter of authority on proper identification. In such cases of cheques drawn in favour of government officials, the specimen signatures of these officers will be supplied to the bank in advance, and care will be taken by the bank to see that the signature given as discharge on the cheque agrees with the specimen signature on record. Standard Operating Procedure for use of prepaid Debit Card for Permanent Imprest has been issued by Office of CGA vide OM No.R/20001/1/2020-GBACGA/548-658 dated 14th July, 2021. The use of prepaid cards help reduction of cash payments for incurring expenditure through permanent imprest held by Head of Offices/DDOs and payments through contingent advances sanctioned to designated officers.
4.2.3.4 Category ‘C’ Cheque (NOT NEGOTIABLE AND NOT PAYABLE IN CASH - CREDITABLE TO GOVERNMENT ACCOUNT ONLY)
These cheques contain the superscription 'Government Account'. These are meant for payment of inter-departmental or inter-governmental claims other than payment of loans and grants-in-aid to State Governments and to UT Governments/Administrations. This will be irrespective of location of the payer and payee offices, and will be arranged only by issue of cheques of this category and not by demand drafts. RBI, Central Office, Mumbai vide their letter No. 2669/GA 64(12)/79-80 dated the 12th May, 1980 addressed to all the Public Sector Banks transacting Government business, have issued directions for encashment of outstation cheques of this category pertaining to 'Government Account' at par.
What This Means
This para defines three categories of government cheques. Category 'A' (Negotiable) cheques are for personal claims to gazetted officers, contractors, suppliers, and PSUs - they are payable to the named payee's order, must include the payee's bank account number and bank details, and non-salary cheques above Rs 500 and salary cheques above Rs 1,000 must be crossed and marked 'Account Payee'. Category 'B' (Non-Transferable) cheques are for paying government officers for salaries and office expenses - they are drawn by official designation, marked 'Not Transferable', and payable only to the named officer (or their authorized messenger with ID). Category 'C' (Government Account Only) cheques are for inter-departmental or inter-governmental settlements - they cannot be cashed and must only be credited to a government account, with RBI directing all banks to encash outstation Category C cheques at par.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Category A (Negotiable): for personal claims, contractors, PSUs - must include payee's bank details, crossed above Rs 500/1000
- 2Category B (Non-Transferable): for government officer salaries and office expenses - drawn by designation, not negotiable
- 3Category C (Government Account only): for inter-departmental/inter-governmental settlements - creditable only to government accounts
- 4Prepaid debit cards can be used for permanent imprest expenses to reduce cash payments
- 5No formal acquittance needed when salary is directly credited to the officer's bank account
Practical Example
A PAO processes three different payments. First, Rs 2 lakh to a furniture supplier - a Category 'A' cheque is prepared (though electronic payment is preferred) with the supplier's bank account number, bank name, and 'Account Payee' marking since it exceeds Rs 500. Second, Rs 50,000 to a DDO for disbursing office contingencies - a Category 'B' cheque is drawn in favour of the DDO by designation, marked 'Not Transferable'. Third, Rs 15 lakh settlement with the Ministry of Railways - a Category 'C' cheque is issued marked 'Government Account', which the Railways' PAO can deposit only into a government account, and the bank encashes it at par even if from another city.
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 Category B cheque be given to someone other than the named officer?▼
What is a Category C cheque used for?▼
Is acquittance needed for electronic salary payments?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.