Rule 248 — This rule explains what needs to be done when a ce
Original Rule Text
Rule 248 All sanctions of loans issued by a Department of Central Government or an Administrator of Union Territory in exercise of their powers under the relevant provision of Delegation of Financial Powers Rules shall include a certificate to the effect that the same is in accordance with the rules or principles prescribed by the Ministry of Finance and that the rate of interest on the loan and the period of repayment thereof have been fixed with the approval of that Ministry.
What This Means
This rule explains what needs to be done when a central government department or a Union Territory administrator approves a loan. Whenever they sanction a loan using the financial powers given to them, they must include a special confirmation, often called a certificate, with the loan approval document.
This certificate must clearly state two important things. First, it must confirm that the entire loan sanction process follows the specific rules or guidelines set by the Ministry of Finance. Second, and very importantly, it must explicitly state that both the interest rate charged on the loan and the timeframe given for repaying it have been specifically approved by the Ministry of Finance.
In essence, it's a double-check mechanism to ensure that all government loans are issued consistently, adhere to central financial policies, and have their key financial terms (like interest and repayment) vetted and approved by the Ministry of Finance.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Central Government Departments and Union Territory Administrators must include a certificate with every loan sanction.
- 2This certificate applies when they sanction loans using their delegated financial powers.
- 3The certificate must confirm that the loan adheres to the rules and principles prescribed by the Ministry of Finance.
- 4It must also explicitly state that the loan's interest rate has been fixed with the Ministry of Finance's approval.
- 5Furthermore, the certificate must confirm that the loan's repayment period has also been fixed with the Ministry of Finance's approval.
Practical Example
Imagine the Ministry of Housing and Urban Affairs is sanctioning a loan of ₹100 crores to the Municipal Corporation of Jaipur for a new urban infrastructure project. When the sanction order for this loan is prepared, the Ministry's finance division must ensure compliance with Rule 248.
They would draft a certificate to be attached to or included within the sanction order. This certificate would state that the ₹100 crore loan is being issued in accordance with the inter-governmental lending guidelines issued by the Ministry of Finance. Crucially, it would also confirm that the agreed interest rate of, say, 7% per annum, and the repayment period of 20 years (including a 5-year moratorium), have both received specific approval from the Ministry of Finance. Without this explicit certification, the loan sanction would not be compliant with the General Financial Rules, 2017.
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.