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Rule 89 - DBT Payments | KartavyaDesk

GFR 2017

Original Rule Text

Rule 89 providers. (5) Ministries/Departments will use PFMS platform for processing of payments for cash / in kind transfers to individual beneficiaries as per framework laid down by Department of Expenditure, Ministry of Finance. (6) Implementing Agencies shall generate Electronic Utilisation Certificate (E-UCs) on PFMS portal and submit them online. EUCs shall be used to certify that money was actually utilized for the purpose for which it was sanctioned to eliminate the need for physical generation of UCs. (7) Transaction charges for the financial intermediaries facilitating DBT payments shall be paid as stipulated by Ministry of Finance.

What This Means

Rule 89 of the General Financial Rules (GFR) 2017 focuses on how government departments make payments, especially when directly transferring money or goods to individuals (Direct Benefit Transfer or DBT). It mandates the use of the Public Financial Management System (PFMS) for these DBT payments. This ensures transparency and accountability in how government funds reach the intended beneficiaries. Think of it as a digital highway for government money, making sure it gets to the right people efficiently and with a clear record.

This rule affects all Ministries and Departments involved in DBT schemes. It also impacts the Implementing Agencies that actually carry out the schemes on the ground. Instead of paper-based processes, these agencies now need to use the PFMS portal to generate and submit Electronic Utilisation Certificates (E-UCs). These E-UCs act as proof that the money was used for the intended purpose, replacing the old physical certificates. Finally, the rule also addresses the transaction charges paid to banks or other financial institutions that help facilitate these DBT payments, ensuring these charges are in line with the Ministry of Finance's guidelines.

In essence, Rule 89 promotes a digital, transparent, and accountable system for DBT, reducing paperwork and ensuring funds are used effectively for the benefit of citizens.

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

Key Points

  • •Mandates the use of PFMS for processing DBT payments (cash or in-kind).
  • •Requires Implementing Agencies to generate and submit Electronic Utilisation Certificates (E-UCs) via PFMS.
  • •E-UCs replace physical UCs, ensuring funds are utilized for the sanctioned purpose.
  • •Transaction charges for DBT payments are governed by Ministry of Finance stipulations.
  • •Applies to all Ministries/Departments involved in DBT schemes and their Implementing Agencies.

Practical Example

The Ministry of Rural Development is running a DBT scheme called 'Gram Vikas Yojana' to provide financial assistance to rural families for building toilets. Under Rule 89, the Ministry uses the PFMS platform to disburse ₹12,000 directly to the bank accounts of eligible beneficiaries. The Implementing Agency, the 'Zila Parishad, Jaipur', after verifying the construction of the toilet, generates an Electronic Utilisation Certificate (E-UC) on the PFMS portal, confirming that the ₹12,000 was indeed used for toilet construction. This E-UC eliminates the need for the Zila Parishad to submit a physical Utilisation Certificate. The bank facilitating these DBT payments charges a small transaction fee per transaction, which is paid by the Ministry as per the rates prescribed 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.

Frequently Asked Questions

What is PFMS and why is it important under Rule 89?▼
PFMS (Public Financial Management System) is a platform used by the government for tracking and managing funds. Under Rule 89, it's crucial because it's the mandated system for processing DBT payments, ensuring transparency and accountability.
What are Electronic Utilisation Certificates (E-UCs) and how do they differ from physical UCs?▼
E-UCs are digital certificates generated on the PFMS portal that confirm funds were used for their intended purpose. They replace the traditional paper-based physical UCs, streamlining the process and reducing paperwork.
Who is responsible for generating and submitting E-UCs?▼
The Implementing Agencies, which are the organizations responsible for carrying out the DBT schemes on the ground, are responsible for generating and submitting E-UCs through the PFMS portal.
What happens if an Implementing Agency fails to submit an E-UC?▼
Failure to submit an E-UC can lead to delays in further fund releases and may result in audits and inquiries to ensure proper utilization of funds. It's a critical requirement for maintaining accountability.
Where can I find the latest guidelines on transaction charges for DBT payments?▼
The latest guidelines on transaction charges for DBT payments are stipulated by the Ministry of Finance. You should refer to their official circulars and notifications for the most up-to-date information.

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 89 of GFR 2017, which platform is mandated for Ministries/Departments to use for processing payments involving cash or in-kind transfers to individual beneficiaries?

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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