(i) The penal interest levied on accredited banks cannot be waived. Only the period of delay counted for calculation of penal interest can be relaxed/condoned by the Committee/CGA on case to case basis. Following are some of the cases in which period of delay can be relaxed/condoned for calculation of penal interest:
(a) Force majeure such as war or by an act of God -The effective period of the Force majeure clause for relaxation of time period of delay will be decided by the O/o CGA in consultation with RBI.
(b) Continuous holidays as per RBI calendar
(c) Annual/Half yearly closing of accounts of banks (1st of April & 1st of October)
(ii) The period of strike by the Bank's staff will not be excluded from the permissible period for remittance of Government revenues (O/o CGA OM no S-11012/3(35)/CBDT/DE/2003- 04/RBD/790 dated 14/05/2008)
(iii) The committee will take into account all factors responsible for delay and wherever justified, will condone only the period of delay.
4.6.11 Grounds for Appeal:
In cases where the decision of the Committee is not found acceptable by either the Ministry/Department or the bank, an appeal can be filed with the CGA within 30 days of the
committee. The decision of the CGA will be final and binding.
(Authority : CGA’s OM No. S-11012/1(31)/AC(22)/2015/RBD/332-424 dated 9th March 2016 and OM No. S 11012/2/3/RBI/2018/GBA/158-1606 dated 19th September 2019 )
MEMORANDUM OF INSTRUCTIONS ON BANKING AND ACCOUNTING ARRANGEMENTS IN CONNECTION WITH RECEIPTS AND PAYMENTS ON GOVERNMENT ACCOUNT BY PUBLIC SECTOR BANKS UNDER THE SCHEME OF DEPARTMENTALISATION OF ACCOUNTS.
A scheme for the decentralization of accounts of the individual Ministries/ Departments of the Government of India was introduced in three phases with effect from 1st April,1976. Under the scheme of departmentalisation of accounts, the responsibility for maintenance of accounts at all levels was transferred from AG to Integrated FAs of the Ministries/Departments. The arrangements in connection with payments and receipts of Government by public sector banks under the scheme of departmentalisation of accounts are indicated in this Memorandum for guidance of all concerned.
Note: Detailed Memorandum of Instructions outlining the banking and accounting arrangements in connection with the receipt of income tax and other direct taxes, central excise duties, and payment of civil pensions under the scheme for collection of taxes, dues etc. of scheme for payment of pension through public sector banks have been issued separately.
What This Means
This para establishes the rules for waiving penal interest on accredited banks and the grounds for appeal. The penal interest itself cannot be waived - only the delay period used to calculate it can be relaxed or condoned by the CGA committee on a case-by-case basis. Acceptable reasons for relaxation include force majeure (war, acts of God), continuous holidays as per the RBI calendar, and annual/half-yearly closing of bank accounts on April 1 and October 1. Importantly, bank staff strikes do not qualify for relaxation. If either the Ministry/Department or the bank is dissatisfied with the committee's decision, they can file an appeal with the CGA within a prescribed timeline.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
1Penal interest itself cannot be waived - only the delay period can be relaxed/condoned
2Relaxation is granted case-by-case by the Committee/CGA for specific reasons
3Acceptable grounds: force majeure, continuous RBI holidays, annual/half-yearly bank account closing
4Bank staff strikes are NOT excluded from the delay period and do not qualify for relaxation
5An appeal against the committee's decision can be filed with the CGA
Practical Example
An accredited bank delayed remitting Rs 10 lakh in government receipts by 4 days. The bank argues that 2 of those days were continuous RBI holidays. The Pr.CCA raises a penal interest claim for 4 days, but the bank appeals to the CGA committee. The committee examines the RBI holiday calendar and condones the 2 holiday days, reducing the effective delay to 2 days. Penal interest is recalculated for the reduced period. The penal interest rate remains unchanged - only the number of delay days is adjusted. If either party is unhappy with this decision, they can appeal to the CGA directly.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can penal interest on banks be completely waived?▼
No. The penal interest itself cannot be waived. Only the period of delay used to calculate it can be relaxed or condoned by the Committee/CGA for specific, justified reasons.
Do bank strikes excuse delays in remitting government receipts?▼
No. The period of strike by bank staff is explicitly not excluded from the permissible period for remittance, as per CGA OM dated 14/05/2008.
What qualifies as force majeure for waiver of delay period?▼
War or acts of God. The effective period of the force majeure clause is decided by the CGA office in consultation with RBI on a case-by-case basis.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
2. The Integrated FA of the Ministry/Department will make budget allocations tovarious wings, departments or formations under his jurisdiction, on the strength of which the PAOs in charge of PAO issue letters of credit, assigning the amounts allotted to Drawing and Disbursing Officers, quarterly or at other intervals as may be convenient, sending the necessary intimation directly to the concerned branches of public sector banks with whom the Department or Ministry is banking. Payments on behalf of a drawing and disbursing officer served by a branch during a specified period will not exceed the amount of assignment or letter of credit. Accounts opened by the branches on the strength of letters of credit assigning limits for drawing are known as “assignment accounts” or “letter of credit accounts”. Some of the Government officers may be allowed, asfar as the paying bank is concerned, to operate on Government Account without limit of account. Such accounts are known as “drawing accounts”. There is a third type of Government account known as “Personal Ledger Account”. These are of the nature of regular current accounts opened in the name of Government Officers for the purpose of booking receipt and drawings, the essential condition being that drawings are restricted to the balance in the account.
3. The concerned branch will maintain a ledger in form as per Annexure-1 for assignment or letter of credit account of each drawing and disbursing officer for whom the branch will be acting as banker. For personal ledger accounts, form as per Annexure-2 will be used. Full particulars such as the name of the account, the date of opening the account, name and designation of the officials authorised to operate on the account, a reference to the letter from which the authority is derived, the amount of the assignment or letter of credit and the number of the cheque book and the number of cheque leaves which will be usedfor operation on the account will be recorded at the top of the first page of the account under the authentication of an authorised official of the bank. The essential particulars relating to the account will be carried over to subsequent folios under the initials of the checking official.
4. The specimen signature of officials authorised to operate on the assignment or letter of credit accounts or drawing accounts will be obtained on sheets prescribed by the bank for the purpose. If specimen signatures are furnished on letters, they will be cut out and pasted on cards. The specimen signature should invariably be attested by another Government Official, by one
whose specimen signature is already recorded with the bank. If this is not possible, the specimen signature should be got attested by the Reserve Bank. Where a fresh specimen signature is furnished due to a change in the incumbency of the drawing official, incoming official’s specimen signature should be duly attested by the relieved official. Government Department maintaining accounts with the bank will make use of their own cheque forms for drawing on the accounts. For this purpose, the Head of Accounting Organization i.e. Pr.CCAs/CCAs/CAs(i/c) as the case may be, will make an annual or half- yearly assessment of the total number of cheque books required for his Ministry and either place a consolidated indent or authorise a senior officer in each department of the Ministry to place an indent for his department with the Deputy Controller of Stamps, Central Stamp Stores, Nasik, giving detailed instructions in regard to the distribution of the cheque books to various Pay and Accounts Officers or DDO as the case may be. The Drawing Officer will intimate to the branch concerned the number of the cheque book and the number of the cheque forms contained therein, whenever a new cheque book is brought into use. The signature on such advices will be verified by the authorised official of the branch and the particulars of the cheque book will be noted in the relative ledger under his initials, suitable remarks being made on the advices at the same time.
5. While passing Government cheques, apart from the checks and precautions usually exercised by banks, the following points will be observed:-
(i) Signature appearing on the cheques should be carefully scrutinized and compared with the specimen signature of the authorised official record with the bank.
(ii) Different periods of currency are prescribed for different classes of cheques in the Treasury Rules and these are usually printed on the cheques themselves. It should be ensured that a cheque presented is current in accordance with the period applicable to it.
(iii) In order to ensure that fraudulent and unauthorised cheques are not presented, each drawing officer will draw cheques only on one branch of a bank specified in this behalf by the integrated FA or by any other person nominated by him.
(iv) As a further safeguard against fraudulent payments and with a view to protecting the interests of Government, any cheque in respect of the salary or pension of any person for an amount of ₹ 1000/- or more and any other cheque in respect of any expenditure other than the salary of an office employee or contingent expenditure for the office if it is in excess of ₹500/- will be marked “Account Payee”.
(v) If a cheque is for an amount which is smaller than the amounts mentioned above and is not crossed in this form, it will be paid only to the payee on identification, or to his banker on a certificate from the banker that the amount has been placed to the payee’s credit, or to a person holding a letter of authority from the payee, after the payee’s signature on the letter has been certified and the messenger has been duly identified.
(vi) Inter-departmental and inter-governmental adjustment will be made by means of cheques. In all such cases, the cheques will be superscribed with the words “Account Government”. Where a cheque is superscribed with the words “Account Government”, the amount of the cheque should not be paid in cash and the drawee bank should ensure that the proceeds are paid to the credit of the Ministry, department or office of the Government concerned, either with itself orwith another bank in the public sector conducting business on behalf of that Ministry, department or office as the case may be. (vii)When amounts are required by officers of the Government to enable them to make disbursements of pay and allowances of non-gazetted staff and contingent or other expenditure in cash on behalf of Government, the cheque will be superscribed with the words “not transferable”. Where a cheque is superscribed with the words “not transferable”, the proceeds may be paid in cash, care being taken to ensure that payment is made either to the payee himself on identification or to his authorised agent being a person holding a letter of authority from him or to the payee’s banker. It should be borne in mind that payment can be made to a person holding a letter of authority from the payee
only if the latter’s signature is known to the bank or he can be identified to the paying bank and also that payment can be made to the payee’s banker, only on his furnishing a certificate that the amount has been placed to the payee’s credit. A transfer of the cheque by endorsement in such cases should not be allowed under any circumstances.
(viii) The amount assigned or the amount mentioned in the letter of credit should not be exceededat any time by reason of the payment of any cheque. As Government cheques are issued in favour of individuals, private firms, joint stock companies and quasi-public bodies, it is essential that the staff attending to the payments should be fully conversant with the nature of endorsements to be made on the cheques by each class of payees. Unless it is proved that payment is made in due course i.e. in good faith and without negligence, the bank cannot secure the protection afforded by Sections 85 and 85A of the Negotiable Instruments Act.
6. In the case of cheques drawn in favour of Government Officials, the specimen signatures of the latter should be supplied to the bank in advance and care should be taken by the bank to ensure that the signature given as discharge on cheques agrees with the specimen on record. The specimen signatures of the payee officials will not be recorded along with those of the drawing officials. They will be kept in separate files, alphabetically arranged according to departments to facilitate the verification of endorsements on cheques or signatures on other documents, if any, as and when this may be required.
7. One or more counter clerks conversant with endorsement and the signatures of the Government officials concerned, depending upon the volume of work involved, will be posted to receive cheques drawn on Government account and tendered over the counter for payment in cash. The counter clerk will examine the cheque and, if he finds it prima facie in order and properly endorsed, add his initials on the left hand bottom corner of the cheque and issue a token to the tenderer after recording its number on the cheque. He will then pass on the cheque to the ledger clerk. The ledger clerk will examine the cheque with reference to the various points detailed in paragraph 6 above and if it is found to be in order, will post the cheque in the relative account in the ledger as also in the payment scroll. After entry in the scroll, the cheque will be branded with the pay cash stamp and the serial number of the entry in the scroll recorded on it above the stamp. The ledger and scroll with the relative cheques will be put up to the authorised passing official and the passed cheque will be sent to the cash payment counter for the payment of cash against the surrender of the tokens issued.
8.
(i) Cheques on Government account may be tendered with pay-in-slips or challans, for credit of some other account maintained at the branch, in which case the transactions will be only a transfer transaction. Cheques on Government account may also be received through clearing. In all these cases, the cheques will be examined with reference to the various points detailed in paragraph-6 above, posted in the ledger accounts and payment scroll and duly passed by the passing official.
(ii) Payment scrolls will be prepared in quadruplicate in the form set in Annexure 3.
9. RECEIPTS ON BEHALF OF GOVERNMENT.
Receipts on behalf of Government departments will be dealt with as under:-
(a). The depositor will deposit the amount of dues payable to any department or formation of the Ministry with the branch of the public sector bank, with which the department or formation of the concerned Ministry is banking. The deposit will be accepted in cash or by means of a cheque or draft, along with the appropriate challans in duplicate or triplicate or quadruplicate as required.
(b). Before a deposit on Government account is accepted, the accompanying challans will be carefully scrutinised to see that they are properly filled in. The scrutiny of the challans will be attended to by the counter clerk in the case of those accompanied by cheques or drafts and by the receiving teller in the case of those tendered with cash. The scrutiny will be conducted with special reference to the following points:-
i. that the proper challan form in duplicate, triplicate or quadruplicate as required has been used.
ii. that all the columns which are required to be completed by the tenderer have been filled in and that the remitter’s signature with his full address and the date of the remittance are furnished thereon. (The amount to be deposited is recorded in both words and figures by the tenderer in thechallans).
iii. that the correct head of account to which the amount should be credited in Government account is clearly written on the challan, either by the remitter or the departmental officer on whose account the amount is deposited.
iv. that where the challans are accompanied by cheques or drafts, the latter are drawn or are endorsed in favour of the concerned branch.
v. that the particulars of the cash or cheques or drafts are entered on the reverse of the challans in the space provided thereon and
vi. that the amounts creditable to different heads of accounts are not entered in the same challan.
(c). After scrutinising the challan and satisfying himself that the amount of cash, cheque or draft as tendered agrees with the amount shown on the challan, the receiving counter clerk or teller will issue a paper token to the depositor to facilitate delivery of the receipted challan to him. In the case of challans accompanied by cheques or drafts, the counter clerk will indicate on the token the date on which the receipted challan will be available for delivery to the depositors. Paper tokens of different colours, serially numbered, may be used for tenderers of cheques or drafts or cash as the case may be. The tokennumber will be recorded at the time of its issue on the receipt portion/copy of the challan to facilitate delivery of receipted challans to depositor.
(d). All receipts on account of Government will be entered in a receipt scroll in quadruplicate in the form set out in Annexure 4, with separate column for cash, transfer and clearing. challans with cheques or drafts will be entered in the clearing column of the scroll as on the date on which the proceeds of the cheques or drafts are expected to be realised. A separate scroll will be prepared for eachdepartment or formation of the Ministry, and for each major head of account, if required by the department or formation of that Ministry. The serial number of each entry in the scroll will be recorded on the corresponding cheque for the purpose of identification. Each day’s scroll will also be given a running serial number for the accounting year from 1st April to 31st March, separate serial numbers being givento scrolls of each account to facilitate detection of any omission in submitting the daily scrolls. All copies of the challans will be branded with a suitable receipt stamp containing the name of the bank, branch and centre and in the copy/copies of challans meant for the tenderer the amount should be written in words and figures and that challan
(s) should be signed in full. However, the bank official may only initial against the amount already indicated in the body of other copies of challan(s). As regards Government Departments, the initials and Cash Received stamp of the bank affixed on the challan should be adequate in
view of the additional check available in the receipted scrolls. The receipted challans will thereafter be handed over to the counter clerk for delivery to the depositors against surrender of the paper tokens issued earlier. The scroll will be totalled after the close of business every day by the receiving branch concerned and the books of the branch balanced for the day with reference to the totals of the day’s scrolls and the other transactions of branch. Every depositor will be submitting in the normal course acopy of the challan to the concerned departmental officer. On the basis of these challans, the departmental officer will prepare a weekly statement of receipts giving the number and date of the challan, name of the depositor and the amount deposited and forward the same to the designated Pay and Accounts Officer. The departmental officer will also check the entries in the copy of the scroll received by him with the entries in the statement of receipts and reconcile any discrepancy detected with the bank under advice to the Pay and Accounts Officer. (Please see Annexure 15 for additional precautions to be exercised while passing instruments).
10. Under the revised procedure introduced with effect from 1st May, 1989, all the existing branches of the accredited banks nominated under the erstwhile procedure continue to handle the transactions of the concerned Ministry/departments in the usual way. The Pay and Accounts Officer/Drawing and Disbursing Officers continue to be in account with same dealing branch as hitherto fore. The dealing branches are however, now linked to the newly designated ‘Focal Point’ branch of the accredited bank forthe purpose of reporting. The FPB would invariably be a branch designated as such by the accredited bank at a centre where the PAO is situated. The FPB should preferably be situated nearer to the place of office of the PAO so that unnecessary correspondence may be avoided and better rapport established. The revised procedure is outlined in the following paragraphs:-
(I) DEALING BRANCHES.
The dealing branch will continue to maintain the accounts of the DDOs/PAOs and prepare daily payment and receipt scrolls (Annexure-3 and 4) in quadruplicate separately for each account holder. Each day’s scroll will be given a running serial number for the accounting year from 1st April to 31st March, separate serial numbers being given to scrolls of each account. These serial numbers on the scrolls shall bear prefix DMA (E) for payments and DMA (R) for receipts. The serial numbers of the entry in the scroll will be recorded on the corresponding cheques/challans for the purpose of identification. After the books of the branch are balanced with reference to the total of day’s scrolls, two copies of scrollsalong with relative challans/paid cheques will be sent by them to the FPB with a forwarding memorandum (Annexure -5) on a day-to-day basis. One copy of the scroll will be sent direct by the dealing branch to the concerned DDO. The fourth copy of the scroll will be retained by the branch for its own record. The dealing branch will not report/furnish any documents direct to the PAO. No Date wise Monthly Statement will be prepared by the dealing branch.
(II) FOCAL POINT BRANCH.
(a) The FPB, in addition to acting as a dealing branch, will also be responsible for prompt and accurate accounting of the transactions reported to it daily by all the dealing branches linked to it.
(b) The FPB will receive from dealing branches linked to it, two copies of scrolls along with challans/paid cheques attached to the original scroll. It will separate the original and duplicate copies of scrolls and subject them to careful scrutiny for accuracy. It will consolidate the transactions of the various dealing branches including its own and prepare a Main Scroll in triplicate (Annexure-6) separately for each Ministry/Department giving the totals of all accounts
separately for which scrolls have been received from each branch. Two copies of the Main scroll along with the original copy of the scroll with relative instruments received from various dealing branches will be forwarded to the concerned PAO on day-to-day basis. The duplicate copy of the scrolls without instruments, received from the dealing branches will be stitched and retained by the Focal Point branch for its record. Simultaneously, the aggregate of the receipts and payments arrived at in the main scroll will be incorporated in a daily memorandum (Annexure-7) and same will be reported to its link cell at Nagpur on a day-to-day basis. The daily memorandum by the FPBs of SBI are however sent to SBI, Governments Accounts Department, Bombay on a day-today basis. While furnishing the daily memorandum in Annexure-7 to the link cell/SBI, GAD Mumbai as the case may be, the FPB is also to furnish a certificate to the effect that necessary scrolls/paid cheques/challans, etc. have already been submitted to the concerned Government officials. The report in Annexure-7 is to be sent through telex/telegram, if the net amount is ₹1 lakh and above. A ‘nil’ advice is to be sent where there are no transactions to report. The Main scrollsubmitted to PAO as well as the Memo/Nil advice to link cell should bear a serial number in consecutive order for the year from 1st April, to 31st March.
(c) Since the challans/paid cheques are important documents evidencing payments into/withdrawal from Government account, utmost care has to be exercised by the dealing branch/focal point branch to ensure that no challans/paid cheques are lost/misplaced while handling the documents. However, in the event of loss/misplacement of documents during transit, a certificate should be prepared by the Focal Point branch in lieu of lost challans/paid cheques in consultation with the dealing branch and attach it to the copies of relevant scrolls. The certificates should be serially numbered, separately for challans and paid cheques and number indicated against the entry in the relevant scrolls. Arecord thereof should be maintained by the Focal Point branch. If the lost/misplaced challan/paid cheque is recovered subsequently, it should also be forwarded to the concerned departmental officer separately citing a reference to the relative certificate. (It should be ensured that reimbursement is claimed by focal point branches only after the relative documents are submitted to the government accounting authorities.)
(d) The PAO, on receipt of copies of Main Scroll and supporting documents, will certify and return the duplicate copy of the scroll within 24 hours to the FPB after verification. The FPB should keep a watch on the prompt receipt of the certified copy of the scroll from the PAO.
(e) The Focal Point branch should ensure that:-
i. the mistakes/discrepancies pointed out by PAO are rectified after proper verification through errorscroll, where necessary, as per the procedure, ii. the missing challans/paid cheques are submitted to PAO directly, iii. the copies of Main Scrolls duly verified by PAO are kept on its record, iv. the mistakes/discrepancies in scroll, resulting from erroneous entry of credit or debit, will be rectified by withdrawal of erroneous credit or debit by minus credit or minus debit as the case maybe, and not by passing contra debit/credit adjustment by the banks.
(f) Methodology to be followed for adjustments of wrong debits/credits.
i. the original transaction, which was booked wrongly may be shown as minus figure under the relevant column in the Error scroll and then the correct transaction may be entered. The total figures as appearing in the Error scroll under Receipt and Payment Columns, i.e. minus or plus, may be incorporated in the relevant scroll of the department for the day. Suitable remarks may also be made in the office copy of the original scroll against the relevant entry for which adjustment has been carried out. The aggregate Receipts and Payments figures of the scroll,
minus or plus as the case may be, after adjustment of the error, may be reported to the Focal Point branch. The FPB will incorporate the receipt and payment figures of the dealing branch, as they appear on the branch scroll viz. Either minus or plus in the Main Scroll and the aggregate Receipt and payment figures, either minus or plus, arrived at in the Main Scrollshould be reported to Reserve Bank for settlement through link cell at Nagpur or SBI, GAD, Mumbai as the case may be.
ii. For the purpose of interbank settlement, the minus receipts may be treated as ‘Payment’ and the minus payment as ‘Receipt’ and the branch account may be credited and debited accordingly.
iii. When the totals of receipt and payment transactions arrived at in the Main Scroll reveal a minus figure, it/they should be reported as such. However, for purpose of inter branch adjustments/settlement the minus receipt and minus payments may be taken as payment and receipts respectively. An illustration of the minus adjustments is furnished below:-
A branch of the bank had effected receipt transactions of ₹ 1,54,000 and payment transactions of ₹ 2,60,000 on 5th March in respect of PAO ‘B’. These transactions had been wrongly reported as ₹5,14,000 (R) and ₹ 6,20,000 (P). Corrections were carried out by bank on 9th March. The receipt & payments transactions of PAO ‘B’ at that branch on that date were ₹ 48,00,000 (R) and ₹ 78,00,000(P). Adjustment entries would appear in the scroll as under:-
Particulars in Error Scroll.
Receipts Payments Correct transaction of 5th March 1,54,000 2,60,000 Withdrawal of wrong figures reported on 5th March (-)5,14,000 (-)6,20,000 Total (-)3,60,000 (-)3,60,000
These minus figures will be adjusted in the Day’s Scrolls (Receipt or Payment as the case may be) on 9thMarch as under:-
Receipts Payments Total transactions of the day (as shown in the respective Scrolls) 48,00,000 78,00,000 Adjustment of error as shown in Error Scroll. (-) 3,60,000 (-) 3,60,000 Total (+)44,40,000 (+)74,40,000
(g) The Focal Point branch will also prepare in quintuplicate, the DMS (Annexure -8) of the respective Ministry/Department and submit four copies thereof to concerned PAO for verification latest by the 3rd of the following month, retaining the fifth copy as office copy. Two copies of the monthly statement will be returned by the PAO duly verified to the Focal Point branch within 3 days of receipt thereof. Out of the two certified copies so received by the Focal Point branch, one copy will be retained by the Focal Point branch and the other will be forwarded to its link cell at Nagpur so as toreach the later by 10th of the following month. In case of Ministries/Departments banking with SBI, however, the Focal Point branch will send the certified copy of DMS to SBI, Government Accounts Department, Mumbai by 10th of every succeeding month.
(h) The Focal Point branch will be responsible for reconciliation of accounts with the respective PAO and settle any discrepancy pointed out by him. The adjustments on account of discrepancies/errors pointed out by the PAO will be incorporated in a separate error scroll and reported to PAO/link cell (orSBI, GAD, Mumbai as the case may be) for accounting.
Note: Out of the two copies, original copy of DMS will be retained by the PAO for his record and the duplicate duly verified sent to his Principal Accounts Office/Controller of Accounts latest by 8th of the following month.
(III) LINK CELL AT NAGPUR (IN CASE OF MINISTRIES/DEPARTMENTS BANKING WITH AUTHORISED BANKS OTHER THAN SBI.
(a) The link cell of the bank at Nagpur on receipt of daily advices/telegrams/telex from various Focal Point branches will decode them and report them through Daily Memo (Annexure-7) to RBI, Central Accounts Section, Nagpur which will generate daily statements and simultaneously carry out necessary adjustments both in Government and bank accounts. The link cell while furnishing the daily memo in Annexure -7 to CAS, Nagpur will also furnish a certificate to the effect that relevant documents have been submitted by its Focal Point branches to the respective Government officials. Two copies of the relative daily statements will be sent by CAS, Nagpur to link cell of the bank which will retain one copy and return the other to CAS duly verified. Link Cell will maintain PAO-wise records of transactions/adjustmentsmade. Link Cell will verify the data in the statement as furnished by CAS, with reference to branch memo/advices. Discrepancy, if any will be pointed out to CAS, Nagpur for rectification in the subsequent statement. RBI, CAS, Nagpur will also generate on behalf of the link cell of banks, monthly statements showing transactions (1) PAO wise date-wise (Annexure -11) and (2) Ministry/Department-wise PAO-wise (Annexure-12). Two copies of PAO-wise statement will be forwarded to the link cell by RBI, CAS, Nagpur. One copy of the statement will be furnished to the PAO by the Link Cell by 5th of the following month retaining the other copy as its record. As regards Ministry-wise statements, one copy of the statementswill also be furnished to the link cell by RBI, CAS. The RBI, CAS, Nagpur will send one copy each of monthly statement, PAO-wise and date-wise, i.e. (Annexure-11) and
(ii) Ministry wise PAO-wise i.e. (Annexure-12) along with consolidated monthly statement to the CCA/CA of the Ministry/Department by 15th of the following month.
Note: - The arrangement of generating monthly statement by CAS, Nagpur on behalf of Link cell is a purely temporary measure. Link Cells will be required to take over their work when they are computerized.
(b) Link Cell will also prepare separate statements (Annexure - 10) for adjustment of discrepancies reported by Focal Point branch and furnish them to RBI, CAS, Nagpur for adjustment in Ministry’s. Accounts. RBI, CAS will process them, PAO-wise on the computer and furnish two copies to Link Cell.One copy will be retained by it and the other will be returned to RBI, CAS, Nagpur.
GAD, Mumbai (IN CASE OF MINISTRIES/DEPARTMENTS BANKING WITH SBI).
(a) On receipt of daily memorandums/telegrams in respect of transactions from various Focal Point branches, the Government Accounts Department, Mumbai will consolidate the position and report the consolidated figures (receipt/payments separately) to RBI. Central Accounts Section, Nagpur for eventual settlement. SBI, GAD, Mumbai while reporting the consolidated figure to RBI, CAS, Nagpur will also furnish a certificate to the effect that relevant documents have been submitted by its focal point branches to the respective Government officials.
(b) SBI, GAD, Mumbai will prepare four copies of monthly settlement statement as per Annexure-11 and forward three copies thereof to RBI, CAS, Nagpur for verification before 5th of the succeeding month.RBI after verification will forward one copy (along with the monthly closing balance statement) to each Principal Accounts Office of the Ministry/Department, one copy to SBI, GAD, Mumbai and retain one copyfor their record.
(c) SBI, GAD, Mumbai will also prepare four copies of monthly settlement statement PAOwise showing transactions date-wise (Annexure- 11) and forward original copy to respective Principal Accounts Office, duplicate/triplicate copy each to the respective PAO and Focal Point Branch
(s) and retain the fourth copy for their record.
(d) SBI, GAD, Mumbai will also prepare monthly settlement statement in duplicate as per Annexure -12 and forward one copy thereof to respective Principal Accounts Office of the concerned Ministry/Department.
(e) SBI, GAD, Mumbai will furnish to CAS, Nagpur daily the Ministry/Department-wise transactions statement. At the end of the month SBI will furnish to CAS, Nagpur (PAO-wise monthly statement of transactions and Ministry-wise/Department-wise monthly statement of transactions to enable CAS, Nagpur to submit consolidated monthly statement to Controller of Accounts.
(V) SELF MONITORING
Link Cell at Nagpur will also receive a copy of certified DMS from its Focal Point branch latest by the 10th of the following month. On receipt, thereof, the link cell should compare entries of receipts and payments in respect of each PAO date-wise with reference to amounts put through as shown in Annexure-8. In case if it finds that the amount as shown in the DMS and as appearing in Annexure-8 differsit should adjust the difference in the daily advice for the next day showing corrections distinctly giving a reference to the date of each transaction. This will ensure settlement of accounts on self-reconciliation basis. In doing so, it should keep a note of corrections in the DMS so that, if later, the same discrepancy is pointed out by the Focal Point branch at the instance of PAO, double adjustments are avoided. A similar procedure should be adopted by SBI, GAD, Mumbai.
(VI) MARCH RESIDUAL TRANSACTIONS:-
(a) The transactions relating to Ministries/Departments, reported by the Focal Point branch to RBI, Central Accounts Section, Nagpur during the month of April may include transactions affected by the dealing branches pertaining to the month of March (or, in exceptional cases, earlier).
(b) The transactions pertaining to a financial year are required to be adjusted to the extent possible,in the account of that year itself. As such, the transactions effected during the month of March should be expeditiously advised by the dealing branches to the Focal Point branch to enable the later to report the same to RBI, CAS, Nagpur through the link cell. In particular, the transactions taking place from 15th March till the end of the month should be reported by telex/telegram. As regards residual March transactions which could not be reported to RBI during the concerned financial year, the Focal Point branch should segregate from 1st April, all the transactions pertaining to the previous financial year and prepare separate Main scroll for
(a) the residual transactions pertaining to March or earlier (i.e., during the earlier financial year) (b)
current transactions i.e., those effected from the 1st April onwards. The main scroll for March transactions prepared from 1st April to 15th(*) April should be distinctly marked as March Residual-1, March Residual-2 and so on up to March Residual 10(*). Focal Point branch should report these transactions to the Link Cell in separate Daily Memo. i.e., one for March and the other for April transactions. This procedure of reporting should continue up to and including of 10th April, and all transactions thereafter advised by the dealing branches will be reported in the usual manner and adjusted in the accounts of month of report at CAS, Nagpur. The same procedure should also be followed by the link cell in reporting these transactions to RBI, CAS Nagpur. The Focal Point branch should also furnish two separate monthly statements, one pertaining to “March Account” clearly marked as such, covering transaction relating to the period up to 31st March but reported during 1st to 10th April and the other covering the April transactions (which may include transactions of the previous month/s reported after10th April) as usual. The monthly statement pertaining to the” March Account” should be sent to the concerned Pay and Accounts Officer latest by the 30th April. The statement relating to the month of April should be sent latest by the 3rd of the following month in the normal course.
*Date shall be 10th April or as the date notified by RBI in consultation with CGA Office from time to time.
(VII) RBI OFFICES.
With the introduction of revised procedure from 1st May,1989, RBI offices ceased to be the designated offices for settlement of DMA transactions handled by accredited banks. RBI offices, will however, continue to handle the transactions of Ministries/Departments accredited to them either exclusively or concurrently with SBI in the usual way. The RBI offices will follow the procedure applicable to the dealing branches and Focal Point branches as the office function both as dealing branch and Focal Point branch in respect of those Ministries/Departments for which they are acting as bankers. Each office of the Bank will act independently and render accounts to Pay and Accounts Officer. The transactions effected by them in respect of the accredited Ministries/Departments will be accounted for by them in their books and the balances, in Departmentalised Ministries’ Accounts reported to CAS, Nagpur through telegram/telex daily. The offices render scrolls, etc. to the Pay and Accounts Officer/Drawing and Disbursing Officer on daily basis, submit Date-wise Monthly statements to Pay and Accounts Officer for verification/certification and also attend to reconciliation work thereof. RBI offices should telex the PAO-wise monthly receipts and payments of each Ministry/Department to CAS, Nagpur immediately after the month-end transfer of balances followed by detailed monthly statement.
(VIII) RECONCILIATION.
(a) Efforts should be made to verify the scrolls promptly, if any discrepancy is detected, the same should be got settled by personal contact. If the scrolls are verified correctly, the DMS would become onlya copy of verified figures and would not pose any problem subsequently.
(b) the reconciliation work will be done in two parts:-
First part will be reconciliation between the accounts rendered by the dealing branches to focal Point branch. This will be the responsibility of the concerned Focal Point Branch. Second part will be reconciliation from the level of Focal Point Branch onwards right up to the stage of transactions put through. This will be the responsibility of PAO and Focal Point branch concerned.
11. TURN OVER COMMISSION.
The Link Cell of the bank will arrange to submit claims, Ministry-wise/Department-wise, for turnover commission on Government transactions settled with RBI, CAS Nagpur to that office on quarterlybasis for settlement. They have to ensure that adjustments on account of discrepancies of transactions originally reported are furnished in separate statements. It should also ensure that adjustments of discrepancies are correctly taken into account for arriving at total Government turnover and there is no double claim of turnover commission on account of such adjustments.
12. RECOVERY OF INTEREST ON DELAYED REMITTANCES:
Government of India levy interest on remittance delayed for credit to Government account and on excess/double reimbursement obtained by banks. In view of this, dealing branches/Focal Point branches and Link Cell should ensure that the transactions are reported promptly and correctly to avoid payment of interest (please see Annexure-14 for detailed procedure for recovery of interest from public sector banks).
13. Job cards No.1,2 and 3 have been given at the end for the guidance of banks for branch level receipts, branch level payments and focal Point branch level procedures.
14. It will be desirable for every bank transacting any business under the arrangements referred to in this memorandum to open currency chests at centres where receipt and payment transactions on Government account under this scheme are likely to be handled.
15. It may be necessary for the Comptroller and Auditor General of India to undertake a percentage audit of the transactions under this scheme. It is, therefore, suggested that as far as possible the books and ledgers connected with Government transactions may be segregated.
ASSIGNMENT/LETTER OF CREDIT ACCOUNT LEDGER
(1) Name of the account (in full) …………………………. (2) Address ………………………………………………. (3) Account opened on …………………………………… (4) Reference …………………………… (5) Cheques will be signed by …………………………… (6) Special instructions, if any …………………………… (7) Amount assigned …………………………….. (8) Particulars of cheque books in use
Date Particulars of withdrawals Particulars of cheque Disbursements Progressive total Initials of PAO Remarks No. Date ₹ ₹
(1) Name of the account (in full) …………………………. (2) Address ………………………………………………. (3) Account opened on …………………………………… (4) Reference ……………………………………………. (5) Cheques will be signed by …………………………… (6) Special instructions, if any …………………………… (7) Amount assigned …………………………….. (8) Particulars of cheque books in use
Date of entry No. of book No. of cheque forms
Date Particulars of Deposits/ withdrawals Particulars of cheque Debits Credits BalanceCr. Amount Initials Remarks No. Date ₹ ₹ ₹
Code No Dealing Branch Code No.
Head of A/c. (PAO) Code No. - ...........................
Name of Drawer :…………………………………….. (i.e. PAO/DDO)
Sr. No. Cheque Amount Progressive Total Initials No. Date Cash ₹ Clearing ₹ Transfer ₹ ₹ P.
Name of Bank ………………………………………………..
Head of A/c. (Min./Deptt./PAO)
Sr. No. Name of DepositorChallanno. Amount ProgressiveTotal Initials Cash₹ Clearing ₹ Transfer ₹ ₹ P.
ANNEXURE - 5 Statement - 3
Daily Advice of Transaction (To be submitted by dealing branches to Focal Point Branch) in respect of Union Ministries' Transactions -- (Expenditure Accounts)
Name of the PAO:Code No.
The Branch Manager
Code No. ..........
Name of Dealing Branch:
Name of Ministry/Deptt. :Code No. .........
Disbursements (₹)
The Receipt/Payment Scrolls along with receipted challans, paid cheques etc. must be attached to this Advice.
MAIN SCROLL -- UNION MINISTRIES' EXPENDITURE ACCOUNTS
Name of Focal Point Branch: …………........................…… Code No………………............... Name of PAO : ……….........………………Code No………………..........Running Sr. No………............ Name of Ministry/Deptt…….......………………Code No…………............ Date: ………………….
Sr. No. Name of Dealing Branch Date of Transaction at dealing branch Receipts ₹ Payments ₹ Remarks Sub-Total Transactions of Focal Point Branch Grand Total
1. To be prepared in triplicate
2. Two copies -- original with scrolls and paid cheques/receipted challans and duplicate without documents to be submitted to PAO on a day-to-day basis. 3. Duplicate copy duly verified by PAO, to be obtained by the Focal point branch on a day-to-day basis. 4. Third copy to be retained as office copy. 5. Scrolls of dealing Branches with documents to be attached to original Main Scrolls should be in the same order in which entries are listed in this Main Scroll. 6. The Grand Total of receipts and payments should be reported to Link Cell, Nagpur on a day-today basis.
Branch Manager Branch Seal
Daily Memo TRANSACTIONS ON BEHALF OF RBI (Government transactions)
Sr. No………………….. Date: …………………..
Name of Bank: ………………………. Code No……………... Name of Focal Point Branch: ………………………… Code No……………...
Receipts Code No. On a/c. of Code No. Disbursement s Central Govt. Railways* Postal Accts.* Defence* Telecomm* DMA* Total Receipts Total Total Disbursements Net Receipts/ Disbursements Check Total
Telegraphed Not Telegraphed
*Name of Ministry/Dept. (Minor) Accounts and Code No. Receipts Disbursements
(In Quintuplicate)
Union Ministries' Expenditure Accounts -- Monthly Statement Of Receipts and Disbursements for the Month of ………………..20……..
Name of Bank …………………………………………Code No. ……………… Name of Focal Point Branch ……………………… Code No. ……………… Name of PAO ………………………………………....Code No. ……………… Name of Ministry/Deptt………………………………. Code No………………..
Date Receipts ₹ Disbursements ₹ Initials of Supv. Official 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. Total
Instructions for compilation of the form:
(i) To be prepared in Quintuplicate.
(ii) Four copies to be sent to Pay and Accounts Officer concerned and fifth copy to be retainedat the Branch.
(iii) Two copies will be received back from Pay and Accounts Officer duly certified. One certified copy should be forwarded by the Branch to Link Cell, Nagpur so as to reach them on or before 10th of the following month. The other verified copy be filed.
Note: To be compiled and handed over to PAO for verification latest by the 3rd of the following month.
Transactions on account of Departmentalised Ministries' Accounts
(Union Ministries' Expenditure Accounts) Sr. No……………. Date ……………..
Name of Bank:......................................Code No. :
Name of Focal Point Branch: ..................................... Code No.: Month of Account:
(Applicable for residual March Account only)
Receipts Code No. of Disbursements Ministry PAO Total
Disbursements: ………………………
Net amount may be credited/debited to DMA by contra debit/credit to our Current Account No. I maintained with you.
Officer-in-Charge of Link Cell
Transactions of Union Ministries' Expenditure Accounts Amendment Statement -- Receipts/Disbursements*
Serial No. :.......................
Date:.......................... Name of Bank: .......................... Code No. : ...................................
amend the entries against the following heads of accounts as indicated below:
Name of Focal Point Branch Code No. Mini/Deptt. Code No. Name of PAO Code No. Date of transactions Original amount ₹ Amended amount ₹
Officer-in-Charge of Link Cell
Amendment to Receipts & Disbursements should be reported in separate statements.
Settlements made by................................................. on account of (Name of Bank)
Union Ministries' expenditure Account transactions PAO-wise, date-wise for the month of ………………………………….
Name of Ministry/Deptt.……………… Code No:
Name of Focal Point Branch: Code No. .......................
Name of PAO: ………………………Code No......................
Date of Transactions Date of settlement with RBI, CAS, Nagpur Amount settled Receipts ₹ Payments ₹
Statement showing monthly settlements made by ……………………………………………………..(Name of Bank)
PAO-wise, of the Ministry of ………………………Deptt. Of………..
For the month of ……………………………………………………….
PAO Code No. Name of Focal Point Branch Code No. Amount settled Receipts ₹ Payments ₹
FLOW OF DATA IN RESPECT OF UNION MINISTRIES'/DEPARTMENTS EXPENDITURE ACCOUNTS UNDER REVISED SCHEME
PROCEDURE SPECIAL INSTRUCTIONS 1. Cheques on Government account are presented for payment in cash on counter. The cheques are alsoreceived through clearing/transfer. Cheques in respect of salary, pension etc. for ₹1000/- and above and cheques in respect of expenditure, if in excess of ₹500/-, are marked "account payee". 2. Examine the cheque properly with reference to its currency, amount and verify the signatures of the issuing authority in addition to the usual precaution taken while passing a cheque. It should also be ensured that the amount mentioned in the letter of credit should not be exceeded at any time by reason of payment of any cheque and that the cheque is 'freefrom stoppage'. Cheques for lesser amount are paid to payeeonly on identification or to his banker on a certificate from the banker that the amount has been placed to the payee's credit or to a person holding a letter of authority from the payee, after proper verification of identification. 3. The clerk should add his initials on the left-hand bottom corner of the cheque and issue a token after recording the token number on the cheque. Cheques meant for payment to the payee who is a Govt. Officer for disbursement of salaries etc. of office establishment and for office contingencies and marked 'Not Transferable' and payable to 'payee only' are paid to himself or his authorised agent holding a letter of authority on verification of payee's signature. 4. The Ledger Clerk will examine the cheque as stated in (2) and post the amount in the ledger as alsothe payment scrolls. All inter-departmental and inter-Governmental adjustments are made by means of cheques superscribed with the words "Account Government" not to be paid in cash but only credited to their account. 5. Brand the cheque with 'Pay Cash' stamp and record the Serial number of the entry in the scroll onit. 6. The ledger and scroll along with the relative cheques to be put up to the authorised passing official and the passed cheques to be sent to cash payment counter for payment of cash against the surrender of the token issued. The cheques received through clearing/transfer are similarly scrutinised and passed by the authorised passing office. 7. Payment scrolls to be prepared in triplicate or quadruplicate as the case may be in form Annexure -
8. Serial number of each entry in the scroll to berecorded on the cheque. 9. Each day's scroll to be given a running serial number from accounting year 1st April. Give the prefix 'DMA (E)' for serial numbers onthe scroll. 10. Total the scroll at the end of each day and balance the books with reference to the totals of the scrolls. 11. All paid cheques are noted individually in the payment Register, where following details are recorded. (1) Date of payment (2) No. of cheques (3) Amount of cheques. 12. On the next day, the original and duplicate copies of scrolls with the cheques attached to the original copy of the scroll along with a forwarding Memo in Annexure 5 to be sent to the designated Focal point branch. If a DDO is in account then the triplicate copy will be forwarded to him, the quadruplicate being retained for record. If the dealing branch and the focal point branch are not at the same Centre, send the scrolls/cheques, etc. by Registered Post.
JOB CARD NO. 2 BRANCH LEVEL RECEIPTS PROCEDURE SPECIAL INSTRUCTIONS 1. Counter Clerk will accept the receipts in the form of cash/cheque/ draft along with the challans in duplicate/ triplicate/ quadruplicate as the case may be. (a)Following things are to be checked in the challan. (1) Amount (2) Name and address of the depositor (3) Head of account (4) that the proper authority has authorised the bank to accept money (5) the amounts to be credited to more than one head of account are not included in the same challan. (b)In the case of cheque/draft, it should be checked that 1. The cheques/drafts are in favour of the PAO maintaining account with the bank. If not, theyshould be properly endorsed. 2. In the case of account payee cheques, specialendorsement is required authorising the bank to collect and credit the amount to the account of the concerned PAO. The banks will not have to receive amounts from members of public unless the relative supplementary memorandum of instructions on banking and accounting arrangements of the concerned ministry provides for this. 2. In the case of challans accompanied by cheques/drafts, acknowledgement is given on the triplicate/quadruplicate copy of challans as a token of receipt. 3. Enter in a Receipt scroll in triplicate or quadruplicate inform Annexure - 4. 4. Record the serial number of the entry in the scroll on theright-hand top corner of the challan. 5. Give running serial number for the accounting year from1st April to each day's scroll Give the prefix 'DMA(R)' for serial numberson the scroll. 6. Brand all copies of the challans with a suitable receipt stamp containing name of the bank, branch and centreand only one copy of challan to be returned to the depositor will be signed in full by an authorised official. 7. Receipted challan may be handed over to counter clerkfor delivery to depositor. 8. Total the scroll at the end of each day and balance thebooks with reference to the totals of the scrolls. 9 All receipted challans are noted individually in the
receipt Register wherein the name of the depositor, hisaddress, amount and date of receipts are written. 10. On the next day, the original and duplicate copies of scrolls with the challans attached to the original copy of the scroll to be sent to the designated Focal Point branch. If a DDO is in account, then the triplicate copy will be forwarded to him, the quadruplicate being retained for record
JOB CARD NO. 3 FOCAL POINT BRANCH PROCEDURE SPECIAL INSTRUCTIONS 1. On receipt of two copies of scrolls along with challans/cheques attached to the original scroll, separate original and duplicate copies of the scrolls and subject them to careful scrutiny for accuracy. 2. Consolidate the transactions of the various dealing branches including your own and prepare a Main Scroll in triplicate in Annexure - 6 separately for each Ministry/ Department giving total transactions of each branch. Give a serial number in consecutive order to theMain Scroll. 3. Forward 2 copies of the Main Scroll along with original copy of the scroll with the relative instruments received from various dealing branches to the Pay and Accounts Officer on a day-to-day basis. 4. Stitch and retain the duplicate copy of the scroll without any instruments received from the branches for your record. 5. Incorporate the aggregate of the receipts and payments arrived at the Main Scroll in the Daily Memo (Annexure -7) and report to your Link Cell at Nagpur on a day-to-day basis. a. Give a serial number in consecutive order to the Memo/Nil advice. b. Send the report to your Link Cell through Fax/telex/telegram, if the net amount is ₹1 lakh and above. c. Send a 'Nil' advice if there are no transactions to report. 6. Keep a watch on the prompt receipt of the certifiedcopy of the scroll from the PAO. Ensure that -
(a) the mistakes/discrepancies pointed out by PAO are verified after proper verification through error scroll. (b)missing challans/paid cheques are submitted to PAO directly.
(c) the copies of the Main Scrolls duly verified by the PAO are kept on the record of the branch. 7. Prepare in quintuplicate the date-wise monthly statements (DMS) in Annexure 8 and submit four copies thereof to the concerned PAO for verification by 3rd of the following month. Retain the fifth copy as office copy. 8. On receipt of 2 copies of verified DMS from the PAO, forward one copy to your Link Cell at Nagpur before 10th of the following month and retain theother copy on your record. Prepare separate set of scrolls for March Residual transactions upto 15th of April. Report these transactions in a separate Daily Memo to Link Cell during the above period.
ADDITIONAL PRECAUTIONS TO BE EXERCISED WHILE PASSING VARIOUS INSTRUMENTS FOR PAYMENT.
(1) It should be ensured that the instrument presented for payment is genuine, valid and outstanding.
(2) Stoppage, if any, should be verified with reference to the stop list.
(3) The signature of the drawing officials on the instruments should be verified by the passing officials before passing the instruments for payments with reference to the specimen signatures of the authorised officials on record.
(4) The specimen signature cards of the DDOs should be maintained with the care. These cards should be indexed, classified account-wise, periodically updated and invariably held in the custody of passing officials. To ensure quick access to specimen signatures it would be advisable to allot serial numbers to the various specimen signature cards and arrange the cards in serial order. The said numbers whenever allotted to the DDOs may be intimated to the concerned Government Department and they may be requested to clearly indicate the names and designations of the signing officials and to quote the number allotted to them below their signatures on the instruments (and advices) to facilitate identification of the signatures.
DISCONTINUATION OF THE REQUIREMENT OF PAPER TO FOLLOW (P2F) FOR CENTRAL GOVERNMENT CHEQUES UNDER CHEQUE TRUNCATION SYSTEM
(a)The following instructions were issued by RBI as addendum to the instructions and inserted as Annexure 15 of the Memorandum of Instructions vide their circular NO.DGBA.GAD.No.2036/42.01.035/2015-16 dated 31st December, 2015.
(b)In Cheque Truncation System, the ‘drawee bank’ means the dealing branch of a bank accredited to a Ministry/Department on which the cheques are drawn. The ‘presenting bank’ means a branch of any bank where the cheques are presented for payment by the clients. Both the presenting banks and drawee banks would continue to discharge their duties prescribed under various Acts/Regulations/Rules such as the Negotiable Instruments Act, 1881, Banker’s Books Evidence Act 1891, Uniform Regulations and Rules for Bankers’ Clearing Houses, Procedural Guidelines for Cheque Truncation System etc. with respect to payment of cheques. The government cheques would henceforth be paid in CTS clearing solely based on their electronic images. The paid cheques in physical form would be retained by the presenting bank.
(c)In case any draw bank desires to verify the government cheque in physical form before passing it for payment, the image would be returned unpaid under the reason “present with document”. The presenting bank on such instances shall ensure that the instrument is presented again in the next applicable clearing session without any reference to the account holder (payee).
(d)The presenting banks are required to preserve the physical instruments in their custody securely for a period of 10 years as required under Procedural Guidelines for CTS. In case some specific cheques are required for the purpose of any investigation, enquiry, etc. under the law, they may be preserved beyond 10 years. Drawee banks shall make necessary arrangements to preserve
the images of all government cheques for a period of 10 years with themselves or through the National Archival System put in place by the National Payments Corporation of India (NPCI).
(e)The government cheques paid by a drawee bank across its counter by way of cash withdrawal or transfer also need to be truncated and preserved for 10 years. Adequate safeguards shall be built to ensure that these images are captured separately by the drawee banks and not mixed up with the images of the instruments received for payment in clearing. A common electronic file containing the images of all the paid cheques shall be created on a daily basis for onward transmission to government departments.
(f)As prescribed in para 7 of the Memorandum of Instructions, the drawee bank (dealing branch) shall continue to send the payment scrolls, monthly DMS, etc., to the designated Focal Point Branch as hitherto. The Focal Point Branch, in turn, will forward the same to the concerned PAO. As the paid cheques would no longer be available with the dealing branch, the same will not be attached with the payment scroll. However, the electronic images of paid cheques (by way of cash, clearing and transfer), preserved by the presenting branch, shall be provided to the PAOs (through Focal Point Branch) by way of secured electronic communication/e-mail, etc., as per their requirement.
(g)At any time during the preservation period of cheques, for the purpose of reconciliation, enquiry, investigation, etc., the PAO may require any paid cheque in physical form for which the PAO would approach the Focal Point Branch. Whenever so demanded by the PAO, the Focal Point Branch shall arrange to furnish the cheques paid by the dealing branch by way of cash and transfer immediately. In case of cheques paid by way of clearing, the same shall be supplied to the PAO within a reasonable period after obtaining it from the presenting bank. It is the responsibility of the presenting bank in such instances to comply with the request of the PAO/drawee bank for any physical cheque and provide the same to the respective PAO /drawee bank within a reasonable period.
(h)At present, the CTS is operated on grid basis. Hence, the government cheques drawn on RBI/agency banks shall be presented in the grid within whose jurisdiction the accredited/authorised branch of paying bank is located.
(i)As hitherto, the Focal Point Branch shall ensure through the dealing branch that the mistakes /discrepancies pointed out in payment scrolls, monthly DMS etc., are rectified as per procedure, missing images of paid cheques are submitted immediately, the copies of the scrolls duly verified by the PAO are kept on its record, etc.
The above guidelines became effective in respect of cheques issued from 1st February, 2016.
INSTRUCTIONS REGARDING THE PROCEDURE FOR INDENTING SAFE-CUSTODY, ISSUE AND ACCOUNTAL OF CHEQUE BOOKS IN THE DEPARTMENTALISED ACCOUNTING SYSTEM.
It has been decided after consultation with the Comptroller & Auditor General of India that the following procedure will be followed in regard to indenting, safe-custody, issue and accounting of cheques/cheque books in the Ministries/Departments in which the Departmentalised accounting system has been introduced.
2. ANNUAL INDENT
The supply of cheque-books of different varieties required for making payments by the Pay and Accounts Officers and cheque drawing departmental officers will be made by the Controller of Stamps, Nasik Road. For this purpose, all the PAOs should intimate their requirements of cheque books including the requirements of cheque-drawing officers in their jurisdiction, for the next financial year to the Head of Accounting Organization of the concerned Ministry/Department before the 15th January every year.
3. ASSESSING THE REQUIREMENTS
The annual requirements should be based on the average of the actual consumption of cheque forms during the preceding calendar year i.e. from January to December of the previous year. Additional provision may be made while preparing the indent for extra requirements which can be anticipated during the next financial year. The stock in hand as well as the requirement of cheque books for the remaining three months of the current financial year should also be taken into account. To the requirements so worked out, a reserve stock of cheque books equal to approximately three months' requirement, should be added, to meet unforeseen requirements and to safeguard against delay in printing, transmission etc.
4. PREPARATION AND SENDING OF CONSOLIDATED INDENT BY HEAD OF ACCOUNTING ORGANIZATION.
Based on requirements intimated by all the Pay and Accounts Officers, a consolidated annual indent will be prepared by the FA through the Principal Accounts Office indicating the requirements of different varieties of cheque books and sent to the Controller of Stamps, Nasik Road by the end of January every year. Specimen signatures of an Officer in the Principal Accounts Office will be sent to the Controller of Stamps, Nasik Road by the CCA.
The total requirements of cheques of each Ministry/Department will be sent by the Press to the indenting officers of the Ministry/Department concerned who will in turn have to dispatch the requisite number of cheques to different PAOs/Cheque drawing DDOs (including those at outstations under their control). The name of the Ministry/Department/ Organisation/PAO and also the name of the branch of the bank will have to be stamped by means of a rubber stamp, on the cheques before issue.
5. ACCOUNTING VERIFICATION OF SERIAL NUMBER ETC.
The cheque books received from the Controller of Stamps, Nasik Road will contain machinenumbered cheque forms. On receipt of the bulk supply of cheque books, they should be carefullyscrutinised under the supervision of the officer-in-charge to see that each book contains the number of cheque forms specified therein, and that serial numbers printed thereon are in consecutive order. The actual counting of the cheques and the checking of their serial numbers may be done by the Junior Accountants of the Sections who will sign each book in full in token of having conducted the check. The cheque-cashier and the officer-in-charge, will test check 10 per cent and 5 per cent respectively, of the cheque books checked by the Junior Accountants and should sign in the books so test checked by them.
There is no objection if the Principal Accounts Office, immediately on receipt of the cheque books, supplies these cheque books in the same sealed packets as received from the Security Press, to the different PAOs under its control as per their indents processed and consolidated by the Principal Accounts Office It shall then be the responsibility of the receiving PAO to open the packets and verify the correctness of cheque-leaves/cheque books as per instant orders and take the cheque books on stock. In case any discrepancy is noticed by the PAO on receipt of the packets the PAO should bring it to the notice of the Principal Accounts Office immediately, who shall take up the matter with the India Security Press from whom the cheque books are received.
The cheque books received in excess of the annual requirements of the PAOs would, however, continue to be retained in the Principal Accounts Office who shall verify the correctness of the cheque books/cheque leavesand take them on stock.
6. CUSTODY AND STORAGE.
The cheque books will remain in joint custody of the cheque-cashier and the officer in charge. The stock of blank cheque books should be stored in a steel almirah with double lock of which one key should be kept by the Officer in Charge and other by the Cheque-Cashier. The duplicate set of keys willbe kept in an envelope duly sealed by the Officer in Charge and the Cheque Cashier, in the custody ofthe Head of the Office/Principal Accounts Office. In the case of an outstation PAO comprising only one Pay and Accounts Officer, the duplicate set of keys duly sealed in a cover, may be kept in the relevant branch of the bank with which the Pay and Accounts Officer is in account.
Note: - If the double lock system for custody of cheque books is not feasible in any office owing to the smallness of the establishment or lack of facilities, the cheque books should be in the custody of the Head of the Office under lock and key. The Head of the Office will be responsible for their safecustody and issue, to the Cashier as and when required, of the required number of cheque books.
7. STOCK REGISTER OF CHEQUE-BOOKS
A Stock Register of Cheque Books/Forms should be maintained to keep an account of the receipts, issues and balance of cheque books/forms (Form CAM 1). Each morning, the ChequeCashier should take such cheque books from the Officer in Charge, as are likely to be used during the course of the day and should remain responsible for their use and return of the balance at the close of the day. Another register should be maintained by the cashier for showing the cheque forms received by him each day and those returned by him. The entry should be made by the Cashier with his dated initials in this register.
The Drawing and Disbursing Officers vested with cheque drawing powers, will requisition their requirement of cheque books from the concerned PAO. The latter will supply to the DDO the minimum number of cheque books, sufficient for his requirement for three months. Issue of such books will also be entered in the stock Register of Cheque books.
In cases where the power of drawing funds by cheque
(s) is withdrawn from any cheque drawing DDO, all the unused forms from the partly used/wholly unused cheque books with that officer shall be defaced by writing the word 'cancelled' promptly across each cheque form and its counter-foil (but without the signature of the Drawing Officer) and returned to the Pay and Accounts Officer concerned who shall destroy them after keeping a note in the relevant records.
If and when a PAO is wound up, all partly used/wholly unused cheque books in the custody of that office shall be returned along with a complete account of cheque books so remaining as per the Stock Register, to the Principal Accounts Office, which shall in turn take action on the same lines as indicated in the above sub-para.
9. DAILY ACCOUNT OF CHEQUE FORMS USED
An account of cheque forms used daily should be maintained by the Cashier in (Form CAM 2) and submitted to the Officer in Charge at the time of closing of the accounts daily. In this register the cheque numbers used during the day should also be noted.
10. ACCOUNT OF CHEQUES BY DDOs
The Drawing and Disbursing Officers enjoying cheque drawing powers will also maintain the account of cheque books and the cheques used daily in the same form as detailed in para 7 and 9.
11. STOCK TAKING AT THE CHANGE OF THE OFFICER IN CHARGE
Every six months, in April and October, stock taking of the cheque books should be done by an officer other than the officer-in-charge (cheques) and a certificate of physical count recorded by him in thestock register. This stock taking should also be done whenever there is a change of the officer in charge (cheques) and the relieving officer should initial the entry in respect of each of the cheque book noted in the Form CAM 2 and sign a certificate in the Stock Register in the following form :-
"Received the current cheque books as indicated by my initials in the register of account of cheque forms and the unused cheque books from ........... to as entered in the Stock Register"
Note:- In the case of a PAO comprising only one Pay and Accounts Officer, half-yearlyphysical verification of stock of cheque-books may be arranged as indicated below:-
(a) if at any station, there is more than one such PAO functioning under a Principal Accounts Office, mutual physical verification may be entrusted among those PAOs;
(b) if at any station, there is only one such PAO under a Principal Accounts Officer but there are PAOs functioning under other/another Principal Accounts Officer, the Principal Accounts Offices by mutual consultation could arrange for the physical verification between their PAOs;
(c) if a single such PAO is located at any station, then the physical verification may be
conducted by the Inspecting Officer of the internal inspection party entrusted with the inspection of that office or by any other gazetted officer (including Dy. Controller of Accounts, Controller of Accounts, or CCA) who visits the office on any official work. In the case of a cheque drawing DDO the physical verification can be entrusted either to the Inspecting Officer of the internal inspection party conducting the normal inspection of his office or be any gazetted officer of his Department who visits that office on any other official work.
12. INTIMATION TO BANK REGARDING USE OF CHEQUE BOOKS
Before the cheque books are actually brought into use, during a particular period, the officer in charge (cheques) shall send intimation in Form CAM 3 to the bank upon which he draws the cheque, notifying the serial numbers of the cheque books and the number of cheques contained therein. The DDOs authorised to issue cheques will intimate the chequenumbers etc. to the bank as well to the PAO.
13. xxxxxx not printed
14. Whenever facilities are available, cheques will be written by means of cheque perforating machines which will use indelible chemical ribbon, to give adequate safeguards against fraudulent alteration in the cheques. The cheque forms for this purpose will have to be obtained, not in the form of bound books butin the form of rolls. The indent for such rolls should be made separately from that of the bound cheque booksand separate account of such cheques should be maintained.
15. Whenever cheques in book form are used, the details of the payee, the amount and date should be filled in the counterfoil.
(Vide Ministry of Finance, Department of Expenditure, Special Cell OM NO.F.2(27)/76-SC dated 14.5.1976, D.O. letter No.F.2(12)/76-Spl.Cell 1490-1503 dated 16.8.1976 and CGA's OM No.S.11019/App.4/78/TA/4652 dated 28.7.1979).