Para 11.19 — Monitoring the State's cash balance in the Reserve
Original Rule Text
11.19 The duty of watching the balances of the State in the Bank and Treasuries and Sub-treasuries devolves on the Finance Department of the State Government or on the Accountant General if the State Government so desires. For the purpose of Accounts, the cash balance of each State in the Books of the Accountant General will be reconciled each month with the Cash Accounts rendered by Treasury Officers and with the statements of closing balances received from the Central Accounts Section of the Reserve Bank. As regards balances in the Bank, process of reconciliation will be as follows:-
(a) the head 'Reserve Bank Deposits' on the books of the Accountant General will contain 3 sub-heads namely:-
(i) Reserve Bank DepositsTreasury.
(ii) Reserve Bank DepositsHeadquarters.
(iii) Reserve Bank DepositsCentral Accounts OfficeReserve Bank.
At some State Headquarters where there is an Accountant General as well as a Treasury Officer, and the daily sheets of
the Bank are rendered to the Treasury Officer, the net remittances to and from the Bank including those on account of transactions of the local Accountant General will be taken to the Sub-head "Reserve Bank Deposits Treasury".
(b) For facility of reconciliation the Statement of balances rendered monthly by the Central Accounts Section of the Reserve Bank will show separately.
(i) net transactions of the State during the month at each Branch of the State Bank of India operating at District and SubDivisional Headquarters of the State;
(ii) net transactions of the State at the Branch of the State Bank or at the offices of the Reserve Bank operating at the State Headquarters and;
(iii) particulars of adjustments booked against the balances of the State in the Central Accounts Section of the Reserve Bank in the accounts of the month.
(c) The net debits and credits under
(i) will be reconciled by the Accountant General with figures accounted for in the State Section of his books under the head "Reserve Bank DepositsTreasury". The Cash Account of each treasury will contain a certificate of the Treasury Officer that the net amount debited or credited under the Head "Reserve
Bank Deposits-State" in his accounts of the month agrees with the net disbursements or net receipts as the case may be, shown in the daily statements of state receipts and disbursements received from the Branches of the Bank. In effecting this reconciliation, allowance has to be made for transactions in bank sub-treasuries towards the close of a month which, except for the accounts for March, are not brought on the treasury accounts till the accounts of the next month.
The figures under
(ii) will be verified in the same way with the adjustments in the State Section of the accounts under the head "Reserve Bank DepositsHeadquarters" or, where necessary, with the adjustment under the sub-head "Reserve Bank Deposits-Treasury".
The net adjustment under
(iii) will be reconciled with the net figure accounted for by the Accountant General under the head "Reserve bank Deposits-Central Accounts Office, Reserve Bank'. The latter figure will also be agreed with the monthly total of adjustments entered in the Register of Adjustments with the Reserve Bank (Form AC 3, Account Code for Accountants General).
The net debit or credit under the head "Reserve Bank Deposits (State)" verified in the manner indicated above will be transferred before the accounts of the month are closed to the head "8999-Cash Balance-Deposits with Reserve Bank". The balance under this head at the end of the month will then be checked with the balance of the State on the books of the Bank as shown in the statement of balances rendered by the Central
# PUBLIC WORKS BALANCES
Accounts Section of the Reserve Bank. The fact of the reconciliation will be noted in the monthly accounts rendered by the Accountant General to the State Government.
The Procedure indicated in this para should apply mutatis mutandis for the reconciliation of balances on 31st March.
NOTE:- The provisions of this paragraph will apply to the reconciliation of balances of the Central Government with such modifications as may be considered necessary.
What This Means
Monitoring the State's cash balance in the Reserve Bank and treasuries may be done by the Finance Department or the AG (if the State desires). The AG must reconcile the cash balance monthly by comparing its books with treasury cash accounts and RBI closing balance statements. The reconciliation involves three sub-heads under Reserve Bank Deposits (Treasury, Headquarters, and Central Accounts Office) and matching them with the RBI's monthly statements showing net transactions at each bank branch. The verified net amount is transferred to '8999-Cash Balance-Deposits with Reserve Bank' and checked against the RBI's own statement of State balances.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Cash balance monitoring may be by Finance Department or AG (as State desires)
- 2Monthly reconciliation compares AG books with treasury accounts and RBI statements
- 3Three sub-heads: RBI Deposits-Treasury, Headquarters, and Central Accounts Office
- 4RBI monthly statement shows net transactions at each State Bank branch
- 5Verified net balance transferred to '8999-Cash Balance-Deposits with Reserve Bank'
- 6Final balance checked against RBI's statement of State balances
- 7Same procedure applies mutatis mutandis to Central Government reconciliation
Practical Example
The AG of Rajasthan reconciles the State's March cash balance. RBI's statement shows net transactions at 33 district branches, plus headquarters adjustments and Central Accounts Section entries. The AG matches each component: district-level figures against treasury cash accounts (after allowing for end-of-month timing differences), headquarters figures against the local State Bank branch statement, and CAS adjustments against the adjustment register. The total is transferred to the cash balance head and compared with RBI's closing balance of Rs. 5,400 crore for the State.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why does reconciliation have three sub-heads for RBI Deposits?▼
What are timing differences in cash balance reconciliation?▼
Who has the final say on the State's cash balance?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.