Para 7.1.9 — MSO (Audit)
Original Rule Text
7.1.9 Whenever any loss involving the possibility of the Reserve Bank of India being made liable to Government in respect of operations on Government account conducted by itself or by its agents or otherwise comes to his notice, the Accountant General (Audit) should obtain, without delay, such information as he may require on the subject. On receipt thereof, he should at once make a report of the case to the Finance Ministry or Department of the Government concerned for such action as it may deem fit.
# Pursuance of Audit Observations
What This Means
If the Accountant General (Audit) comes across a loss that could make the Reserve Bank of India liable to the Government — arising from RBI's own operations, its agents' actions, or otherwise — the AG must immediately gather the relevant information and promptly report the case to the Finance Ministry or Department of the concerned Government for whatever action they consider appropriate.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Applies specifically to losses where RBI may be liable to Government
- 2Covers RBI's own operations, operations by its agents, or any other related circumstances
- 3AG (Audit) must obtain required information without delay
- 4Immediate reporting to the Finance Ministry/Department of the concerned Government is mandatory
- 5The Government decides what further action to take
Practical Example
During the audit of a state government's banking transactions, the AG discovers that an RBI agent bank mishandled a large government remittance, resulting in a loss of Rs 8 lakh to the state exchequer. The AG immediately gathers documentation of the transaction trail, confirms the RBI's potential liability, and reports the case to the State Finance Department so they can take up the matter with the RBI for recovery.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why is RBI liability treated with such urgency?▼
Who decides the course of action when RBI may be liable?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.