Rule 253 — GFR

Rule 253 (1) Loans to State and Union Territory Governments, Local Bodies, Statutory Corporations, Public Sector Undertakings, etc. Loans shall ordinarily be sanctioned at the normal rates of interest prescribed by Government for the particular category of the loanee. In cases where the normal rate is considered too high and a concession is justified, it shall take the form of direct subsidy debitable to the grants of the sanctioning authority. In such cases interest shall, however, be paid by the borrower in the first instance at the normal rates and subsidy shall be claimed separately.

Rule 253 (2) Agreements and other documentation.

(i) In the case of loans to parties other than State Governments and wholly owned Government Companies, a loan agreement specifying all the terms and conditions shall be executed. A clause shall invariably be inserted in all such agreements enabling Government at any time to call for accounts of the applicant relating to any accounting year with power to depute an officer specially authorized for this purpose to inspect the applicant’s books, if necessary.

(ii) A written undertaking in Form GFR 15 shall be obtained from a wholly Government-owned company at the time of sanctioning the loan. The sanction shall specifically state that such an undertaking would be obtained from the loanee before the drawal of the amount of loan and a certificate that the undertaking has been obtained, shall be recorded by the Drawing Officer of the office of the sanctioning authority in the bill for drawal of the amount of loan. The sanction in respect of loans to other organizations, where a formal agreement is required to be executed, shall also be issued in the same manner.