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Rule 247 - Loan Repayment | KartavyaDesk

GFR 2017

Original Rule Text

annual interest as also repayment of installment of principal in respect of such loans shall fall due on the thirty-first March of the succeeding years and not on the anniversaries of the calendar date in April on which inter- Governmental adjustment on account of such loans was carried out in the books of the Reserve Bank of India. (b) Where no monetary settlement is involved. In regard to cases where adjustment in the books of the Accounts Offices are only involved and actual credit through the Reserve Bank of India is not necessary, the last date of the month of account in which the adjustment is effected shall be taken as the date of drawal of loan for purposes of repayment and charging interest. (viii) In order to avoid any default in the payment of loan, the Principal Accounts Officers or Pay and Accounts Officers who maintain the detailed accounts of loans, shall issue notices in Form GFR19 to the loanees (other than State and Union Territory Governments) i.e. Public Sector Undertakings, statutory bodies and Government institutions etc., say, a month in advance of the due date for the repayment of any instalment of the principal and/ or interest thereon. However, omission to give notice does not give the loanees any claim to exemption from the consequences of default in the repayment of the principal and/or interest thereon.

What This Means

The rule also addresses situations where no actual money transfer is involved, only adjustments in accounting records. In these cases, the last day of the month when the accounting adjustment is made is considered the loan date for calculating repayment and interest. Furthermore, the rule mandates that Principal Accounts Officers or Pay and Accounts Officers must send reminders (using Form GFR-19) to loan recipients (excluding State and Union Territory Governments) about upcoming repayment deadlines. However, even if a reminder isn't sent, the borrower is still responsible for making timely payments.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Loan repayment and interest due date is standardized to March 31st of the succeeding year for inter-governmental adjustments through RBI.
  • •For accounting adjustments without monetary settlement, the last day of the month of adjustment is considered the loan date.
  • •Accounts Officers must send repayment reminders (Form GFR-19) to loanees (excluding State/UT Governments).
  • •Failure to send a reminder does not exempt the loanee from repayment obligations.
  • •This rule aims to ensure timely repayment of government loans and streamline accounting processes.

Practical Example

The National Housing Development Corporation (NHDC), a public sector undertaking, received a loan of ₹5 crore from the Ministry of Housing and Urban Affairs on July 15, 2023. The inter-governmental adjustment was carried out through the Reserve Bank of India. According to Rule 247, the first installment of principal and the annual interest on this loan will be due on March 31, 2024, not on July 15, 2024. The Pay and Accounts Officer of the Ministry of Housing and Urban Affairs, Mr. Sharma, is responsible for sending a reminder notice (Form GFR-19) to NHDC about this upcoming due date in February 2024.

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 Form GFR-19, and where can I find it?▼
Form GFR-19 is the standard format for sending repayment reminders to loanees as per Rule 247. You can find a copy of this form in the General Financial Rules, 2017 document or on the Department of Expenditure's website.
Does Rule 247 apply to loans given to State Governments?▼
No, Rule 247 specifically excludes State and Union Territory Governments from the requirement of sending repayment reminders (Form GFR-19). However, the due date standardization still applies.
What happens if the Accounts Officer forgets to send the reminder notice?▼
While the Accounts Officer is obligated to send the reminder, the loanee is still responsible for making timely repayments. The omission to send the notice does not provide any grounds for exemption from the consequences of default.
If the loan agreement specifies a different repayment date, which date prevails?▼
Rule 247 overrides any conflicting repayment dates specified in the loan agreement for inter-governmental adjustments through RBI. The due date will be March 31st of the succeeding year.
What is the significance of 'inter-Governmental adjustment' mentioned in the rule?▼
Inter-Governmental adjustment refers to the process where the loan transaction is recorded and settled between different government entities through the books of the Reserve Bank of India. This ensures a standardized and transparent accounting process.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 247 of GFR 2017, for inter-governmental loan adjustments carried out through the Reserve Bank of India, on what date does the annual interest and principal repayment installment fall due?

Related Rules

Rule 271General Financial Rules 2017 (amended July 2024) - Rule 271 - Chapter 10Rule 109General Financial Rules 2017 (amended July 2024) - Rule 109Rule 146General Financial Rules 2017 (amended July 2024) - Rule 146 - Chapter 6Rule 169General Financial Rules 2017 (amended July 2024) - Rule 169 - Chapter 6Rule 215General Financial Rules 2017 (amended July 2024) - Rule 215 - Chapter 6

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