Para 6.1 — MSO (A&E)
Original Rule Text
6.1 Government makes loans and advances to public and quasi-public bodies and to individuals. Some of these loans and advances are made under special laws, others for special reasons or as a matter of recognised policy. Except in the case of loans and advances made under special laws or in respect of which Government has issued any general rules or orders, the Accountant General may require that the reasons for making it as well as the conditions on which it is made are stated in full in the orders sanctioning the loan or advance. The Accountant General may also enquire the reason for any unusual condition, e.g. remission of interest in an individual case. The Accountant General should see that the conditions of repayment of a loan or advance are complied with by the debtor and should exercise a close watch over repayment of Principal and realisation of interest, if any. In reviewing the outstanding loans and advances special attention should be directed to irregularities in repayment, acknowledgement of balances and unrealisable and doubtful assets.
What This Means
The government lends money to public bodies, quasi-public bodies, and individuals under various laws or policy decisions. The Accountant General plays a watchdog role: he can demand full details of why a loan was made and under what conditions, he monitors whether repayment terms are being followed, and he keeps a close eye on interest collection. Special attention goes to irregular repayments, unacknowledged balances, and loans that may never be recovered.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Government loans can be made under special laws, policy decisions, or special orders
- 2The AG can require full reasons and conditions for any loan sanction
- 3The AG must ensure repayment conditions are complied with by the borrower
- 4Close watch is maintained over both principal repayment and interest realization
- 5Special attention is given to irregular repayments, unacknowledged balances, and doubtful assets
Practical Example
A municipal corporation receives a Rs. 5 crore loan from the State Government for a water supply project, repayable in 20 half-yearly instalments with 6% interest. The AG's Loan Section enters this in the Subsidiary Loan Register, sets up interest calculation, and monitors each instalment due date. When the corporation misses two consecutive interest payments, the AG immediately writes to the Urban Development Department flagging the default and asking for enforcement of penal interest provisions.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can the AG question unusual loan conditions like interest waivers?▼
What are 'unrealisable and doubtful assets' in the context of loans?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.