Para 4.2 — CAM
Original Rule Text
4.2 MODE OF PAYMENT FROM GOVERNMENT ACCOUNT:
4.2.1. PAYMENT ADVICES: The term ‘Payment advice’ is defined in the R&P Rules, 2022 that it would refer to the instructions issued to the RBI or to the accredited bank for direct credit through authorised mode, either electronically or otherwise of a specified amount to the specified bank account of the payee. The payment advice other than electronically signed advices shall be accompanied by a cheque for an equal amount drawn in favour of the relevant accredited bank.
What This Means
This para defines what a 'payment advice' means in government accounting. A payment advice is an instruction to the RBI or accredited bank to directly credit a specified amount to the payee's bank account through any authorized electronic or other mode. When the payment advice is not electronically signed, it must be accompanied by a cheque for the same amount drawn in favour of the accredited bank. This essentially means that the traditional cheque-based system is being replaced by direct bank transfers, with the payment advice serving as the formal instruction for the transfer.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1A payment advice is a formal instruction to RBI or the accredited bank for direct credit to the payee's bank account
- 2Payment advices can be issued electronically or otherwise through any authorized mode
- 3Non-electronically signed payment advices must be accompanied by a cheque for an equal amount drawn in favour of the accredited bank
- 4This mechanism facilitates the shift from physical cheques to electronic payments in government transactions
Practical Example
A PAO needs to pay Rs 8 lakh to a contractor for building repairs. Instead of issuing a cheque directly to the contractor, the PAO prepares a payment advice instructing the accredited bank to credit Rs 8 lakh directly to the contractor's bank account. If the PAO's office has not yet adopted electronic signing, the payment advice is accompanied by a cheque for Rs 8 lakh drawn in favour of the accredited bank. The bank then processes the direct credit to the contractor. With electronic signing through PFMS, the cheque accompaniment is not needed.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the difference between a payment advice and a cheque?▼
Why does a non-electronic payment advice need an accompanying cheque?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.