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Rule 23 - Loan Repayment Rules | KartavyaDesk

RPR

Original Rule Text

(a) a specific term shall be fixed within which each loan has to be fully repaid with interest due and in very special cases, the term may extend to thirty years; (b) the term is to be calculated from the date on which the loan is completely drawn or declared by competent authority to be closed; (c) the repayment of loans shall be effected by installments, fixed on annual basis, with due dates of payment being specially prescribed; (d) if an installment is paid before its due date, it may be taken entirely towards the principal, provided it is accompanied by payment towards interest due up-to-date of actual payment of installment; if not, the amount of the installment shall first be adjusted towards the interest due for preceding and current periods and the balance, if any, shall be applied towards the principal; (e) when the due date of repayment of any installment of principal or interest falls on a Sunday or a public holiday or a holiday observed by the Reserve Bank, the payment made on the next working day following the Sunday or the public holiday, shall be regarded as payment on the due date and no interest shall be charged for the day or days by which the recovery is so postponed:

What This Means

Rule 23 of the Receipt and Payment Rules outlines how loans given to government employees are to be repaid. It essentially sets the ground rules for loan repayment schedules. The rule states that every loan must have a fixed repayment period, generally not exceeding thirty years in very special cases. This period starts from when the entire loan amount has been disbursed or officially closed by the relevant authority.

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

Key Points

  • •Loans must be repaid within a fixed term, generally not exceeding 30 years in special cases.
  • •The repayment term starts from the date the loan is fully disbursed or declared closed.
  • •Repayments are made in fixed annual installments with specified due dates.
  • •Early payments are applied to the principal after covering accrued interest.
  • •If the due date falls on a holiday, payment on the next working day is considered on time.

Practical Example

Mr. Sharma, a government employee, takes a housing loan of ₹20,00,000 with a repayment period of 20 years. His loan was fully disbursed on March 15, 2024. According to Rule 23, his repayment period starts from this date. His annual installment is fixed at ₹1,00,000, due on December 31st each year. If Mr. Sharma pays ₹1,10,000 on December 15th, 2024, and ₹10,000 covers the interest due till that date, the remaining ₹1,00,000 will be applied towards the principal. If December 31st falls on a Sunday, payment made on January 1st will be considered on time.

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

Frequently Asked Questions

What happens if I can't pay my loan installment on time?▼
Rule 23 doesn't explicitly cover late payments. However, standard loan agreements typically include penalties for late payments, such as additional interest. Consult your loan agreement for specific details.
Can the repayment period of my loan be extended beyond 30 years?▼
Rule 23(a) states that a specific term shall be fixed within which each loan has to be fully repaid with interest due and in very special cases, the term may extend to thirty years. Extension beyond 30 years is highly unlikely and would require exceptional justification and approval from the competent authority.
If I make an extra payment, does it automatically reduce my EMI?▼
No, an extra payment will be applied towards the principal after covering the interest due up to the date of actual payment. This will reduce the outstanding principal amount, potentially shortening the loan tenure or reducing future interest payments, but it won't automatically change the fixed EMI amount.
What does 'declared by competent authority to be closed' mean?▼
This refers to a situation where, for administrative reasons, the loan account is formally closed even if the full amount hasn't been disbursed. The repayment schedule is then calculated from this closure date.

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 23 of the Receipt and Payment Rules, what is the maximum term, under very special circumstances, within which a loan given to a government employee must be fully repaid?

Related Rules

GeneralReceipt & Payment Rules, 2022 - GeneralRule 1Receipt & Payment Rules, 2022 - Rule 1Rule 11Receipt & Payment Rules, 2022 - Rule 11Rule 12Receipt & Payment Rules, 2022 - Rule 12Rule 14Receipt & Payment Rules, 2022 - Rule 14

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