Rule 13 — GAR
Original Rule Text
13. Cash balances held in a State Treasury form part of the Consolidated Fund, the Contingency Fund (if one has been established) and the Public Account of the: State to which the Treasury belongs. The treasury Rules of each State Government issued under article 283 of the Constitution, however, provide that moneys may be received and payments made on behalf of other State Governments, by: a State Treasury. Similarly, moneys may be received: andi payments made by: such treasuries on behalf of the Central Government in the case of certain specified transactions. All: such receipts and payments on behalf of other: State Governments and the Central Government vide
(b) infra shall be taken in the first instance against the cash balance of the State concerned. On receipt of intimation of such transactions through the monthly treasury account or otherwise the Accountant General shall take the following action:- Refer CorrectionSip 1
(a) In the case of transactions pertaining to the other State Governments, the. Accountant General shall make the requisite adjustments through the Central. Accounts Section of the Reserve Bank against the balances of the other State Governments concerned.
NOTE This procedure shall also be applicable to moneys received in the office of the Accountant General on behalf ofa another: State and book entries made in the office of the. Accountant General affecting the accounts of another: State Government.
NOTE (i): As the general banking business of the: State Government of Jammu and Kashmir is at present, not conducted by the Reserve: bank of India, the settlement of transactions between the State Government and other States the Centre, / is effected in cash or by demand drafts in accordance with the instructions contained in separate orders.
(b) In the case of: such transactions of the Central Government, including Railways /1 Postal / Defence Departments at State treasuries (both banking and non-banking), these shall be accounted for by the treasuries in the State Section of Treasury Account under the head "PAO Suspense - Transactions adjustable by PAO Ministry / Department of. below: the Major head 8658 - Suspense Accounts' for necessary cash settlement by the State: Accountant General with the Pay and. Accounts Office. Refer Correction Slin
What This Means
Rule 13 deals with the mirror situation to Rule 12 — handling Central Government and other States' transactions at State treasuries. State treasuries, governed by State Treasury Rules under Article 283 of the Constitution, may receive and make payments on behalf of other State Governments and the Central Government for specified transactions.
When a State treasury handles transactions for another State, the amounts are initially taken against the cash balance of the host State. The Accountant General then makes adjustments through CAS Nagpur to debit the other State's account. This mechanism is straightforward and clean.
For Central Government transactions at State treasuries (a more common occurrence), the mechanism is slightly different: these are classified under the head 'PAO Suspense - Transactions adjustable by PAO Ministry/Department' under Major Head 8658. Subsequently, the State Accountant General settles this with the concerned Central Pay and Accounts Office in cash. Special arrangements apply to J&K because it historically had no RBI banking agreement.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1State treasuries can receive and make payments on behalf of other States and the Central Government for specified transactions.
- 2Other States' transactions at a State treasury are initially taken against the host State's cash balance and later adjusted through CAS Nagpur.
- 3Central Government transactions at State treasuries (both banking and non-banking) are classified under 'PAO Suspense' under Major Head 8658.
- 4Settlement of Central Government transactions is made in cash between the State Accountant General and the concerned Central PAO.
- 5The same procedure applies to transactions occurring in the Accountant General's office itself affecting another State's accounts.
- 6Jammu and Kashmir has special arrangements because it historically did not have an RBI banking agreement.
Practical Example
A pensioner of the Central Government — retired Shri Mohan Lal of the Ministry of Railways — lives in Jaipur and presents his pension payment order at the local State treasury. The Rajasthan treasury pays the pension from its cash balance (initially borne by Rajasthan). This transaction is classified in the treasury accounts under 'PAO Suspense - Transactions adjustable by PAO, Railway Board' under Major Head 8658. The Rajasthan Accountant General then raises the settlement with the Railway Board's PAO in New Delhi, which issues a demand draft to clear the suspense entry, reimbursing Rajasthan.
Separately, if the treasury of Haryana pays a salary advance to an Uttar Pradesh Government employee on deputation in Haryana, this is an inter-State transaction. The Haryana AG will advise CAS Nagpur to debit UP's account and credit Haryana's account for the amount, settling the liability without any physical cash movement between the States.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.