Rule 8 — GAR
Original Rule Text
8. Account of the Central Government with the Bank
(1) Ministries and Departments of the Central Government shall, as ai rule, operate on such offices and branches of the Reserve Bank and or of the bank, as have been, or may be nominated for handling the receipt and: payment transactions of the particular Ministry or Department.
(2) Each office or branch of the Reserve Bank or bank handling transactions of the Ministries, Departments ofthe Central Government shall maintain separate accounts in respect of each Ministry and Department banking with it and render an account of the transactions to the Pay and. Accounts Officer of the concerned Ministry and, or Department, at such intervals as may be prescribed by the Government, together with all the supporting challans, paid cheques. These transactions shall also be routed through the banking channel prescribed by the Reserve Bank of India, to: facilitate their incorporation in the books of the Reserve Bank of India, Central Accounts Section, at Nagpur which is responsible for keeping a complete account, of receipt and payments (including inter-Governmental adjustments and. adjustments inter: se of Defence, Railways and Posts- other than Telecommunications) on account of the Central Government.
(3) The transactions of Railways, Posts, Telecommunicationss andi Defence Department arising at offices and branches of the Reserve Bank: and State Bank of India, acting as agent of the Reserve Bank: shall be distinguished from other Central transactions in the initial accounts and classified separately for each Railways, each circle of Posts, each Accounts Officer of Telecommunication, and: each Controller of Defence Accounts respectively. These transactions will be taken against the Railway Fund, Postal Account, Telecommunication Account and Defence. Account respectively, in the books of the Reserve Bank. Each office and branch of the Reserve Bank entrusted with the work shall furnish to: Accounts Officer concerned of the Railways, Postal, Telecommunications and Defence Department, as the case may be, daily: scrolls relating to the transactions pertaining to each, together with the requisite challans, paid cheques.
statement of the closing balance of the Central Government: shall be sent each month, by the Accounts Section of the Reserve Bank to the Controller General of Accounts, indicating:-
() Central Government Account Balance (in respect of Union Territory Administrations dealt with by. Accountants General and of all Union Territory Governments with Legislature). Refer CorrectoonSip 1
(i) Railway Fund Balance
(ii) Postal Account Balance
What This Means
Rule 8 describes how the Central Government's banking transactions with RBI and the banking system are structured, recorded, and reported. Each ministry and department must operate through RBI/SBI offices nominated for their transactions. Each bank branch maintains separate accounts for each ministry, enabling ministry-specific tracking of receipts and payments.
The rule establishes a multi-layered reporting chain. At the transaction level, bank branches send daily scrolls with challans and paid cheques to the Pay and Accounts Officer of the concerned ministry. At the central level, RBI's Central Accounts Section (CAS) at Nagpur maintains master accounts for the entire Central Government — breaking it down by Railways, Posts, Telecommunications, Defence, and the Departmentalised Ministries — and sends monthly closing balance statements to the CGA.
For special departments (Railways, Posts, Telecom, Defence), their transactions are maintained in separate sub-accounts (Railway Fund, Postal Account, Telecommunication Account, Defence Account) within RBI's books. This separation is critical for individual department accountability while still allowing the CGA to prepare the consolidated Central Government accounts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Ministries must operate through RBI/SBI branches nominated for their transactions.
- 2Each bank branch maintains separate accounts for each ministry/department banking with it.
- 3Bank branches send daily scrolls with challans and paid cheques to the concerned Pay and Accounts Officer.
- 4All transactions are routed through RBI's banking channel to facilitate incorporation in the books of CAS Nagpur.
- 5CAS Nagpur maintains separate accounts for Railways Fund, Postal Account, Telecommunication Account, and Defence Account.
- 6Monthly closing balance statements are sent by CAS Nagpur to the CGA and to Principal Accounts Offices of individual ministries.
- 7Departmentalised Ministries' transactions are tracked in a separate proforma account in RBI's books.
Practical Example
The Pay and Accounts Office (PAO) of the Ministry of Environment receives a daily scroll from SBI, Parliament Street Branch (its nominated bank branch). The scroll for Wednesday, 15 March shows 10 challans for Rs. 23.5 lakh received on account of environmental clearance fees, and 8 paid cheques for Rs. 45.2 lakh representing contractor payments. The PAO reconciles these with its own records and passes accounting entries. Any discrepancy between the PAO's records and the bank scroll must be investigated and resolved before the monthly accounts are closed.
At month-end, CAS Nagpur sends the CGA a statement showing the Central Government's closing balance, broken down into: (i) Central Government Account Balance, (ii) Railway Fund Balance, (iii) Postal Account Balance, (iv) Telecommunication Account Balance, (v) Defence Account Balance, and (vi) Departmentalised Ministries Account Balance. The CGA uses this to verify that its books match the banking reality.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
▼
▼
▼
▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.