Para 8.12.1 — CAM
Original Rule Text
(a) Cases in which normal mode of settlement is through RBI, CAS, Nagpur i.e.
(i) Settlement between Railways, Posts, Telecommunications and Defence departments inter se; and
(ii) Settlement between Railways and CCA of Ministry of Finance DEA as envisaged in para 8.12.1, in cases where the settlement could not be effected before 10thApril or as per date specified by RBI.
(b) Aggregate amount of the transactions to be adjusted between the accounting units is ₹ 5 lakhs and above (gross credit or gross debit).
(c) The proposal reaches the CGA before the prescribed date, in terms of the schedule for closing of annual accounts laid down by the CGA.
8.13.2 The payment of interest on State Railway Provident Fund balances by the Ministry of Railways to Central Revenues shall therefore be settled on 'proforma' basis outside the books of the RBI. This is because in these cases it is not practically possible to calculate the amount and effect monetary settlement of these transactions before 10thof April each year.
What This Means
This paragraph specifies when the normal settlement procedure through RBI CAS Nagpur cannot be completed by the deadline (10th April or the RBI-specified date). For settlements between Railways, Posts, Telecommunications, and Defence inter se, or between Railways and CCA of the Ministry of Finance (DEA), if the aggregate amount is Rs. 5 lakh or above, the unresolved transactions are handled through a special residual settlement procedure. This ensures that large outstanding inter-departmental claims do not remain unsettled indefinitely after the year-end deadline.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Applies when RBI CAS Nagpur settlement misses the 10th April deadline
- 2Covers Railways/Posts/Telecom/Defence inter se and Railways-DEA transactions
- 3Threshold: aggregate amount of Rs. 5 lakh and above (gross credit or debit)
- 4Special residual procedure ensures large outstanding claims are resolved
- 5Prevents indefinite delay in inter-departmental financial settlement
Practical Example
The Railways and the Department of Posts have mutual transactions totaling Rs. 12 lakh for the financial year. Despite efforts, the settlement through RBI CAS Nagpur is not completed by 10th April. Since the aggregate exceeds Rs. 5 lakh, the residual settlement procedure under Para 8.12.1 kicks in. Both departments' accounts officers exchange verified claim statements and resolve the outstanding amount through the prescribed alternative mechanism.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What happens to amounts below Rs. 5 lakh that miss the deadline?▼
Why is RBI CAS Nagpur involved in these settlements?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.