Para 6.12 — MSO

6.12 Moneys paid to a Sinking Fund for repayment of loan should be credited to the head "Sinking Fund for Loans granted to Local Bodies" and entered in the Register Form B prescribed in Para 6.4. Interest will be allowed on these deposits at the same rate as the loan itself bears. The interest payable on these deposits should be credited to the Sinking Fund by deduction from the receipt on account of interest on the loan. When the total balance of the Sinking Fund becomes equal to the amount of the loan, the credit under the head "Sinking Funds for loans granted to Local Bodies" and the debit under "Loans to Municipalities, etc" should be written off against each other.