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GDS COMMITTEE REPORT - CHAPTERWISE AND ANNEXURE WISE





Shri Kamalesh Chandra Committee submitted report on GDS system to the Department & Government on 24th November 2016.

The copy of the Report published in DoP website on 18-01-2017.

It contains 434 pages with 20 Chapters and 39 Annexures with some other pages. 

Downing loading of the Report Copy once at a time is more time taking and felt difficulty.





















ACKNOWLEDGEMENTS (3 PAGES)

The following Annexures contains Statistical tables, data collection and etc.,

ANNEXURE : 01 - 10 (37 PAGES)

ANNEXURES : 11 - 15 (41 PAGES)

ANNEXURES : 16 - 25 (31 PAGES)

ANNEXURES : 26 -30 (25 PAGES)

ANNEXURES : 31 - 39 ( 30 PAGES)

After going through the GDS Committee Report, the Committee observations and comments on GDS system and on GDS beside on the part of Department and Govt are so impressive and courageous.

In brief, the comments are extracted here :

1.   The GDSs working in the net work of GDS Post Offices are Ambassadors of Department of Posts, Ministry of Communications in the rural and remote areas of India……

2.   The Govt of India still holds the same position and has so far held that the Gramin Dak Sevaks are not departmental employees. They are outside the Civil Services of the Union and shall not claim to be at par with the Central Government Employees……

3.   Currently, a large number of well educated, talented and capable youths are joining GDS posts and strengthening the GDS system and this trend is likely to propel growth of the Department in the coming days……

4.   The Committee observed that in last several decades, the Department has not invested enough to strengthen the network of GDS Post Offices until recently……

5.   The quality of life of GDSs and their family’s needs to be improved by  harmonizing their wages and other emoluments in tune with present day’s needs and aspirations of young GDSs joining the workforce….

6.   The Committee also noted that a large number of them are totally dependent upon the emoluments received from the Department and has no other means of livelihood to supplement their income…….

7.   The Committee views that the demand of regularization of their services is due to better emoluments, reliability and security of regular government service. The Committee noted that GDSs are exploited at the hands of their local supervisors because of existing wage structure and their legal status. The administrative powers such as “put off duty” are exercised on frivolous charges and frequently used for exploitation rather than as remedial measures.

8.   The Department recognizes the engagement of GDSs as contractual, but the present method of engagement and disciplinary proceedings, job contents, risks and responsibilities are getting closer to the regular employees of the department….

9.   that there is tendency to withhold the legitimate demands of GDSs which are due to them, based on the apprehension that they will get closer to regular employees and their claim for regularization will be strengthened in the Court of Law, if such demands are allowed. The Committee finds this as unreasonable and counter productive for the Department. It also deprives them of living a happy life in the changed situation where financial dependence on GDS position is increasing day by day because of shrinking alternate means of livelihood…….

10. The Department has lost its tag of having the largest network for providing financial services to the customers by decelerating expansion of network based on the assumption that GDS post offices are loss making and adding to the overall deficit of the Department….

11.  The Committee observed that the ‘Rationalization of Postal Network Scheme’ has also not worked on the expected line….. the Committee supports the demand for presence of postal facility in the headquarters of each of 2.50 lakhs Gram Panchayats and revamping of PSSK and FO Schemes my making it more remunerative as opening of regular or GDS Post Office in each of such location may not be feasible….

12.    The GDS Post Offices, is around 45% of the total deficit (Net Expenditure – Revenue) of Rs.6258.60 crores and around 15% of the total expenditure of Rs.17894.58 crores in the Financial year 2014-15………..the Committee found that total expenditure on GDS system is far less than deficit of the Department.

13.  Future survival of the Department will largely depend on the successful management of GDS Post Offices, which effectively for its “soul”.. It would be difficult for the Department to survive without the soul…..

14. Tust of GDS network which enables the Department to deliver trustworthy services in each and every village of the country that can not be quantified in terms of revenue…

15.  The Committee observed that the Sub Post Masters of single handed Sub Post Offices do not encourage Branch Post Masters to increase their workload as it results into increase in the workload of Sub Post Offices which they are unable to handle properly due to lack of manpower……

16.  Sub Post Office by utilizing the services of capable and willing GDSs in the single handed sub post offices…..

17. the India Post Payment Bank which is going to be rolled out shortly will use the strengths of the GDS net work and experiences of more than 2.60 lakhs trustworthy Gramin Dak Sevaks serving in the Department of Posts….

18.   the GDS network can potentially wipe out the deficit (gap between the expenditure and revenue) of the Department and emerge as rural digital hubs for delivery of DBT and other postal, financial, remittance, third party and several e-services to the rural population and forming an integral part of fulfilling SABKA SAATH  SABKA VIKAS agenda of the Central Government.

Source: GDS Committee Report (Executive Summary)

IPPB - Schedule of Charges



 
 


First IPPB Inauguration at Raipur & Ranchi on 30th January 2017 at 5PM



Secretary, Department of Posts requests the please of your company at the inauguration of the pilot branches of IPPB at Raipur and Ranchi through video conferencing by Arun Jaitely and Manoj Sinha on 30th January 2017, at 5PM, National Media centre, New Delhi.

2 arrested for fraud in postal department recruitment

LUCKNOW: Two members of a gang fleecing job aspirants were nabbed by sleuths of STF on Saturday. Those arrested were identified as Ram Praveen and Dharamraj Kumar, both of Nalanda, Bihar. The police also seized their two mobile handsets. 


SSP STF Amit Pathak said the gang leaked results of exam for selection of multi-tasking staff and postman conducted by Indian Postal services on a fake website ahead of official results. Preliminary investigations revealed the kingpin Dharamraj used to make calls and ask for money promising selection and charged Rs 30,000 from each candidate for the post of multi-tasking staff and postman.

They had duped around 300 students giving them different bank account numbers to deposit cash and had amassed Rs 90 lakh. "We are probing their bank details and also of others associated with the gang," police told TOI. 

The gang used to call up applicants who had scored less than qualifying marks and assured to increase their marks against payment of cash. The gang had leaked data of applicants and results from third party which conducted the examinations. 

They had created a fake website of Indian Postal Department Examination Results and duped thousands of applicants and eventually the exam had to be cancelled. The exam was conducted by Indian PostalServices in December 2015, at Agra, Allahabad, Bareilly and Lucknow. 

To win the confidence of aspirants, the miscreants formed a base in Nalanda, one of the most revered seats of learning in Bihar. STF inspector Abhinav Singh said the probe began when V K Gupta, vigilance officer of postal department lodged an FIR in 2016 regarding the fraud. 


TECHNICAL RESIGNATION & LIEN HIGHLIGHTS – CONSOLIDATED GUIDELINES

Highlights of DoPT OM No. 28020/1/2010-Estt(C) Dtaed 17.08.2016

1. Technical Resignation:

  • Government servant should have applied through proper channel for a post in same or some other Department.
  • If the conditions are met, it will be taken as Technical resignation, even if it was not mentioned as Technical Resignation while applying and all admissible benefits should be extended.
  • If competent authority not allowed the forwarding of application, it will not be treated as Technical resignation.
  • Benefits are admissible even if the employee applied before joining the service and application was not routed through proper channel, provided employee should intimate such application immediately after joining the service.

2. Balance leave credited:

  • Balance of utilized Child Care Leave and other leaves will be carried forward.
  • In case of permanent absorption in PSU/Autonomous Body/State Govt. employee is eligible for cash equivalent of leave salary in respect of EL & HPL at his credit subject to the limit of 300 days.
3. LTC carry forwarded: Entitlement for LTC will be carry forward.

4. Pay Protection: Protection of Pay will be given.
If employee rejoins his previous post:
  • In case employee rejoins his earlier post, he will be entitled for increments for the period of his absence from that post.
  • Transfer of GPF will be governed.
  • Seniority in the post held by the employee on substantive basis continues to be protected.
5. However the period spent in other department will not be counted for minimum qualifying service for promotion.

6. Past service counted for Pension: Employee originally joined before 1.1.2004, joined the new post on technical resignation after 1.1.2004, his past services are counted towards pension.

7. Transfer of NPS account: In case of NPS, the balance standing in Personal Retirement Account along with PRNA will be carried forward to new office.

8. Service Book transfer: Service Book from the date first appointment must be kept in the custody of head office in which employee is serving and transferred with him from office to office.

9. Medical Examination & verification:
  • If standard of medical examination is same for the new post, then employee need not to undergo fresh medical examination.
  • No need for verification of character & Antecedents of the employee, if period of discharging from previous post and appointment to new post is less than a year.
10. Lien will be maintained for two years normally, 3 years in exceptional cases.

11. Joining Time, Joining time pay & allowances:
  • Central & State Govt employees are eligible for joining time, which will be included as qualifying service in new Job.
  • During Joining Time, Eligible for pay equal to pay drawn in old post before relinquishment, DA &
HRA. No Transport allowance
  • Entitled for Transfer Travelling Allowance.
Download Technical Resignation and Lien highlights and OM No. 28020/1/2010-Estt(C) Dtaed 17.08.2016 by clicking the below link
                                                    DOWNLOAD


Compiled by K.V.Ramesh, Sr.JGS IRTSA.

RICT -- DEVICE TRAINING MANNUAL

The introduction of Hand-held Device viz., Main Computing Device (MCD) with all its peripherals going to be used in Branch Post Offices is well presented for the information of GDS and all others.

This gives us preliminary information along with some theoretical knowledge (for unaware GDS) & practical knowledge (for those who are in good practice in some Circles/Divisions) over the MCD (Hand-held Device) and its usage in BOs.


click here for Manual 

Clarification on purchase of Air Tickets from Unauthorized Agents

To


The Secretary, OFB, ID-A, S.K. Bose Rd, Kol-01
All Sr. General Managers/All General Managers
Ordnance/ Equipments Factories.
All Group controllers & Branch AOs

Sub: Clarification on purchase of Air Tickets from unauthorized agents for non- entitled officials to travel by air

Kindly refer to DoP&T letter No.31011/3/2015-Estt(A.lV) dated 18/02/2016 wherein it is mentioned under points 14 & 15 that Govt employees not entitled to travel by air, may travel by any airline. However, reimbursement in such cases shall be restricted to the fare of their entitled class of train/transport or actual expense, whichever is less. In all cases whenever a Govt servant claims LTC by air, he/she is required to book the air tickets either directly through the airlines or through the approved travel agencies viz M/s Balmer Lawrie & Co. Ltd/ M/s Ashok Tours & Travels Ltd/ IRCTC. Booking of tickets through any other agency is not permissible.

This is for your information, guidance and necessary action please.

Dy.Controller
Accounts(Fys)

IndiaPost becomes 3rd entity to receive licence to start payment bank operations



IndiaPost has become the third entity to receive a final license last week from the Central Bank to start its payment bank operations. Country’s largest telcom service provider Bharti Airtel and digital payments firm Paytm are the other two to have received the license while only Airtel has started operations so far. 

The government has also appointed AP Singh has interim MD and CEO of the India Post Payment Bank. A 1986 Indian Postal Service Officer he was earlier Joint Secretary in the department of disinvestment, ministry of Finance and Deputy Director General incharge of financial inclusion and payments systems at Unique Identification Authority of India (UIDAI). Singh was one part of the founding team that launched Aadhaar and was stationed at the department of Post prior to UIDAI. 


As per the initial road map, each post office in the country will offer the post bank services. The department of post has an existing network of around 1,55,000 post offices currently. ET had reported earlier that IndiaPost plans to open 650 new branches for the payment bank. The branches will be co-located with the existing post offices. The idea is that the 650 branches will be in located in postal district headquarters and all the branches under that particular head post office will be enabled by the payment bank services. This will cover the entire network of 155,000 post offices in the country. 


Earlier this month, Airtel Payments Bank launched nationwide operations, offering 7.25% interest on savings bank balances, which is more than the maximum 7% paid by SBI on its fixed deposits. Bharti and Kotak Mahindra, which holds a 20% stake in the payments bank, would invest Rs 3,000 crore in the venture. 

Payments banks can accept deposits from individuals and small businesses of up to Rs 1 lakh per account. And RBI had set a condition that formal license has to be obtained before 31 March. 

ALIBABA backed Paytm also said early in January that it has received the final license from RBI and the company hopes to launch operations in February with the first branch coming up in Noida, Uttar Pradesh.

While operation of Payment Banks such as Paytm are likely to be focused on technology based differentiation, IndiaPost is banking on its huge reach especially in the rural areas to be successful.


Source : http://economictimes.indiatimes.com

Clarification regarding timely payment of GPF final payment to the retiring Government servant

No.3/3/2016-P&PW (F)
Ministry of Personnel, PG & Pensions
Department of Pension & Pensioners’ Welfare
Desk-F
3rd Floor, Lok Nayak Bhavan,
Khan Market, New Delhi-110003
Dated 16th January 2017.

OFFICE MEMORANDUM

Subject: Clarification regarding timely payment of GPF final payment to the retiring Government servant – regarding

            During review meetings held to evaluate the status of implementation of Bhavishya with Ministries/Departments, it was observed that GPF final payment in many cases is not being paid to the retiring Government servants immediately on retirement from service leading to payment of interest for the delayed period.

2. Rule 34 of General Provident Fund (Central Service) Rules clearly provides that when the amount standing at the credit of a subscriber in the General Provident Fund becomes payable, it shall be the duty of the Accounts Officer to make payment. The authority for the amount payable is to be issued at least a month before the date of superannuation, but payable on the date of superannuation. It may be noted that the requirement of submitting a written application by the retiring Govt. servant for GPF final payment has been dispensed with vide this Department’s Notification No.20(12)/94-P&PW (E) dated 15.11.1996 and notified under S.O NO.3228 dated 23.11.19963. As per Rule 11(4) of GPF Rules, in case the GPF balance is not paid on retirement, interest on the GPF balance is required to be paid for the period beyond the date of retirement also. While interest for the first six months beyond retirement can be allowed by the PAO in the normal course, approval of Head of the accounts office is required for payment of interest beyond six months and that of Controller of Account/Financial Adviser beyond a period of one year.

4. To ensure timely final payment of GPF, and to avoid unnecessary financial burden on account of interest beyond retirement, it has now been decided that every case, in which payment of interest on General Provident Fund becomes necessary in terms of Rules 11(4) of GPF Rules, 1960, shall be put up for consideration to the Secretary of the Administrative Ministry/Department. In all such cases the Secretary of the Administrative Ministry/Department will fix responsibility at all levels to take appropriate action against the Government servant or servants who are found responsible for the delay in the payment of General Provident Fund.

5. This issues with the concurrence of the Ministry of Finance, Department of Expenditure, vide their 10 NO.187/EV/2016 dated 2th September 2016.

6. Hindi version will follow.

REFLECTION OF THE RECURRENT LAPSES IN OBSERVING FINANCIAL DISCIPLINE IN THE ANNUAL PERFORMANCE ASSESSMENT REPORT (APAR)

Ministry of External Affairs (MEA) planning to open 650 post office PSKs





The Ministry of External Affairs (MEA) has drawn up ambitious plans of opening post office Passport Seva Kendras (PSKs) in 650 districts across the country soon.

Disclosing this during the inauguration of a post office PSK here on Wednesday, MEA Secretary D.M. Mulay said the MEA was planning to collaborate with the Department of Posts by opening PSKs at district level across the country to meet the growing demand for passports. The demand for passports in India, which is around 2 crore a year, was the third highest in the world after China and the U.S. A total of 60,000 passports are issued every day in the country, he added.

While there are a total of 89 PSKs in the country, the first two post office PSKs were opened at the Metagalli Post office in Mysuru and the Head Post office at Dahod in Gujarat in pilot mode on Wednesday.

Usha Chandrashekar, member, Postal Services Board, who was also present at the inauguration, said the postal officials will be processing the applications for verification of documents and obtaining the photographs and biometrics of the applicants at the post office PSKs.

The Department of Posts, which was earlier only handling posts, has also been handling a variety of other services, including delivering e-commerce parcels, insurance, social security products, and agricultural seeds. Now, it will be handling delivery of passport-related services in an IT-enabled manner, she added.

Union Minister Ananth Kumar, who inaugurated the post office PSK in Mysuru, hoped that all the districts of the country will have a PSK in one year’s time and appreciated Minister for External Affairs Sushma Swaraj’s initiative in the regard.

Pratap Simha, MP, recalled that the demand for a PSK for Mysuru was the first issue on which he had spoken in the Parliament after his election. He revealed that the decision to start a post office PSK in Mysuru from Wednesday was taken only last Friday and appreciated the officials of the Regional Passport Office, Bengaluru, led by RPO P.S. Karthigeyan for making the necessary arrangements in quick time.

GDS ONLINE SOFTWARE - IMPLEMENTATION - REG.

The Department of Posts started the process to fill up the vacant GDS posts by adopting online procedure.

First it starts in four pilot Circles and early in other Circles.

Instructed all Circles to identify GDS vacancies after fill up the vacancies with eligible Casual Labourers by manual procedure. 




Loans and Advances by the Central Government – Interest rates and other terms and conditions

Loans and Advances by the Central Government – Interest rates and other terms and conditions

F.No.5(3)-B(PD)/2016
Government of India
Ministry of Finance
Department of Economic Affairs

New Delhi, the 6th January, 2017

OFFICE MEMORANDUM

Subject:- Loans and Advances by the Central Government – Interest rates and other terms and conditions.

Reference this Ministry’s Office Memorandum F.No.5(3)-B(PD)2015 dated 3rd February, 2016 on the captioned subject.

2. The lending rates, categories and conditions prescribed in the aforesaid Office Memorandum have been reviewed. The revised rates of interest, categories and conditions as given in the TABLE below, would be applicable from 1st April, 2016 and till the time these are reviewed:

TABLE
Category of borrower & type of loan
Interest rate per cent per annum
1. State Governments (EAP Loan):
8.00
2. Union Territory Governments (with Legislature):

(i) Loans upto 1 year and EAP loan
8.00
(ii) Other Loans
8.50
3. Industrial and Commercial Undertakings in the Public Sector and Cooperatives: Loans for implemantation of VRS in sick PSUs


The terms and condition and conditions regarding eligibility of loan would remain the same as that of last year. If any specific request comes in future from any other financial institution/CPSE/Autonomous Body/Cooperative, it would be examined by the Budget Division, DEA on merits of that case.

3. The terms, including interest rate of loans to Foreign Governments may be settled in consultation with Budget Division. Terms for on-lending of funds under externally aided projects should be in accordance with the prescribed pattern. In case, deviation is considered necessary, Budget Division should be consulted.

4. The interest rates prescribed above assume timely repayments and interest payments and hence no further rebate in rates is to be allowed for timely payments.

5. OTHER TERMS AND CONDITIONS
(a) The loan sanctioning authority should meticulously follow the instructions contained in General Financial Rules, 2005 (GFR 2005), particularly, rules framed under Chapter 9 (II-LOANS) of
GFR, 2005, while sanctioning loans to various entities as stipulated therein.
(b) The instructions issued from time to time have been reviewed and are set out in the following paragraphs for facility of reference.

6. STATE GOVERNMENTS
In the case of loans to State Governments, the arrangements for payment of annual instalment of principal and interest will be as under:-
(a) Block loans for State Plan Schemes and other Plan loans for Centrally Sponsored Schemes:- These loans when drawn in instalments, will be consolidated and deemed to have been drawn as on 1st October in each year. The maturity period of the loans sanctioned for State Plans is 20 years, repayments being made in 20 annual equal instalments together with interest on the outstanding balance commencing from the following year, subject to consolidation under the award of Twelfth Finance Commission (TFC).

However, fifty per cent of these loans will enjoy a five year initial grace period, after which repayments of these loans will be effected in 15 annual equal instalments. The amounts annually payable(by way of principal and interest) would be recovered in 10 equal monthly instalments commencing 15th June, subject to debt waiver under the award of TFC.

(b) Other Loans:- The terms of repayment of these loans will be as laid down from time to time.

7. PUBLIC SECTOR PROJECTS
(A) For new installations or expansion of existing institutions:
(a) The terms and conditions of loans should be fixed with reference to the financial picture presented in the approved Project Report. (Once the pattern is settled, there should be no change except with the specific concurrence of this Department for reasons to be stated in writing).(b) The capital requirements of a project should include adequate provisions for interest payment on borrowings during the period of construction (as specified in the Project Report). The interest on loans due during the period of construction will be allowed to be capitalised to the extent of the provisions made for this purpose in the approved Project Report. In other words, while interest on loans advanced to an undertaking during the period of construction will be notionally recovered by allowing its capitalisation, the payment of interest should effectively commence after the construction period is over.

(c) The repayment of principal should ordinarily commence one year after the project commences production, the number of instalments being determined with reference to the financial projections and repaying capacity specified in the Project Report. Requests for further moratorium will be considered only in exceptional cases where the Project Report has specified any special circumstances that may necessitate a longer period of moratorium and has indicated clearly what staggering of repayment would be needed over the necessary break period. The period of loans sanctioned against capitalised interest during the period of construction may also be on the same terms and conditions as are applicable to loans provided for financing the project costs.

(d) A suitable period of moratorium subject to a maximum of five years from the date of drawal of the loans may be allowed for the repayment of instalments of principal, having regard to theNATURE of the project, the stage of construction etc. The period of moratorium should not, however, extend in any case, beyond two years from the date of project going into production, or in the case of programmes of expansion, beyond two years from the date of expanded project coming into operation.

(B) For meeting working capital requirements: The undertakings are expected to obtain their cash credit requirements from the State Bank of India/Nationalised Banks by hypothecating their current assets (such as stock of stores, raw materials, finished goods, work in progress, etc.) and where the entire working capital requirements cannot be raised in this manner by seeking a guarantee from Government. Accordingly, requests from Public Sector Undertakings for funds for meeting working capital requirements should be considered only to the extent the same cannot be had from the State Bank of India/Nationalised Banks.

8. GENERAL REPAYMENT PERIOD
(A) (i) The period for repayment of loans for all parties other than State Governments should be fixed with due regard to the purpose for which they are advanced and it should be restricted to the minimum possible. Normally, no loan should be granted for a period exceeding 10 years. Where a longer period for repayment is sought, prior concurrence of the Budget Division in this Department will be necessary for fixing the period.
(ii) The repayment of a loan should normally commence from the first anniversary date of its drawal or on expiry of the period of moratorium, as the case may be. The recovery should ordinarily be effected in annual equal instalments of principal.
(iii) The period of repayment of working capital loans should preferably be restricted to two or three years. In no case, however, the period of these loans should exceed 5 years.

(B) Moratorium: Subject to exceptions made in respect of pubic sector projects, a suitable period of moratorium towards repayment might be agreed to in individual cases having regard to the project for which the loans are to be utilised. However, no moratorium shouldordinarily be allowed in respect of interest payment on loans. Ministries/Departments may with the approval of their Financial Advisers allow moratorium on repayment of principal wherever considered necessary upto a maximum period of 2 years.

(C) (i) Repayment before due date: Any instalment paid before its due date may be taken entirely towards the principal provided it is accompanied by payment towards interest due upto date of actual payment of instalment; if not, the amount of the instalment will first be adjusted towards the interest due for the preceding and current periods and the balance, if any, will alone be applied towards the principal. Where the payment of the instalment is in advance of the due date by 14 days or less, interest for the full period (half year or full year as the case may be) will be payable. If any State Government repays an instalment of a loan which is consolidated as on 1st October, in advance of the due date by more than 14 days the interest

(ii) Pre-payment premium: Prepayment premium of 0.25% on the loans with residual maturity of less than 10 years and 0.50% for the loans with residual maturity of 10 years and above, shall be charged. The provision does not apply to the loans to State/UT Governments.

(D) Penalty Clause: The loan sanctions/agreements should invariably include a penalty clause providing for levy of a penal rate of interest in the event of default in repayment of instalment(s) of principal and/or interest. The penal rate of interest should not be less than 2.50% above the normal rate of interest at which a loan is sanctioned.

(E) Defaults in repayment/interest payment:
(i) In the event of a default in repayment of loan/interest payment, the recovery of interest at penal rate may not be waived unless there are special reasons justifying a waiver. However, a decision in this regard will be taken by the Ministry of Finance (Budget Division) on the advise of Financial Adviser. Even in such cases, a minimum of 0.25% should be recovered from the defaulting party as penalty.

(ii) The penal rate of interest is chargeable on the overdue instalments of principal and/or interest from the due date of their payment to the date preceding the date of actual payment.

(iii) Whenever a fresh loan is to be sanctioned to a borrower who has earlier defaulted, the loan sanctioning authority must consider the question of recovery of defaulted dues. All releases to Public Sector Undertakings against budgeted outlays should be made only after adjusting the defaults, if any, pertaining to repayment of loans and interest. If for special and exceptional reasons such adjustments are not possible, specific orders of Secretary (Expenditure) should be obtained through Budget Division, before release of fresh loans, in relaxation of extant orders, in conformity
with this Division circular No.F.2 (190)-B(SD)/91, dated 15.10.1991.

(iv) Any defaults should ab-initio serve as a warning signal to the Ministries/ Departments for which curative action has to be taken immediately.

(v) Ministries/Departments need to critically review the financial position of the borrower, including defaulting CPSUs and wherever possible, should take immediate action to recover the money due to the Government.

(vi) In the case of defaulting CPSUs, there has to be a clear road map for restructuring of these CPSUs, as prolonged approval results in burgeoning of defaults.

(vii)Ministries/Departments are to ensure that these defaults do not become fiscally unsustainable.

(viii) Wherever Ministries/Departments are considering restructuring of a CPSU, it must be ensured that besides equity infusion, funds mobilisation, rescheduling of loans/interest payments, write off of dues, etc. should be formulated holistically. However, no request for waiver/postponement of instalments on any ground whatsoever will be accepted, except in cases of companies referred to BIFR or in respect of those companies which have incurred cash losses for last three years, in conformity with this Division circular No.F.2(165)-B(SD)/94, dated 06.10.1994.

(F) Requests for modification of terms of loans:
(i) Borrowers are required to adhere strictly to the terms settled for loans made to them and modifications of these terms in their favour can be made subsequently only for very special reasons. Requests for modification of terms may relate to increase in the period of a loan or of initial moratorium period towards repayment, or waiver of penal interest or reduction in or waiver of normal rate of interest. The procedure of dealing with requests for waiver of penal interest has already been dealt with in paragraph 8. Cases involving other modifications in repayment terms should be considered in consultation with the Budget Division in this Ministry. In referring such cases, the impact of the modifications on the estimates of repayment/interest which have gone into the Budget and Government’s resources position should be succinctly brought out by the administrative Ministry.

(ii) In examining proposals for modification of the period of the loan, the interest rate at which the loan was sanctioned should also be reviewed. In the case of a loan of which repayment has already commenced the revised rate of interest should be applied ab initio only to the residuary portion of the loan outstanding on the date of extension of its period.

(iii) Requests for waiver of recovery of normal interest (either for a specified period or for the entire period) on a loan which originally sanctioned at normal rate of interest, will attract the provisions of Rule 223 (1) of G.F.R.2005 and should be dealt with accordingly.

(G) Loans sanctioned at concessional rates:
(i) In cases where loans are to be sanctioned at a concessional rate, the instructions contained in Rule 223 (1) of G.F.R.2005 have to be observed. In such cases, payment of subsidy (to cover the concession viz. difference between normal rate and concessional rate) should be made conditional upon prompt repayment of principal and payment of interest thereon by the borrower.

(ii) In cases where loans are sanctioned interest free (e.g. loans to technical educational institutions for construction of HOSTELS) prompt repayment should be made a condition for the grant of interest free loans. That is to say, the sanction letter in such cases should provide that in the event of any default in repayment, interest at rates prescribed by Government from time to time will
be chargeable on the loans.

(iii) Similarly, in the case of interest free loans to departmental canteens where subsidy is also provided to meet running expenses, the sanction letter should stipulate that in the event of any default in repayment, the defaulted dues would be recovered out of the subsidy payable.

(H) Miscellaneous: A standard form prescribed for issue of loan sanctions (Appendix-I) should ordinarily be followed.
(i) The date of drawal of a loan by the borrower will be date on which he received cash, cheque or bank draft from the Drawing and Disbursing Officer. It should be ensured that the time lag between the date of obtaining the cash/cheque/bank draft and its disbursement/delivery/despatch to the payee is reduced to the minimum. Where the cheque or bank draft is sent through post, the date of posting should be treated as the date of disbursement of the loan. The Drawing and Disbursing Officer should invariably intimate the date of payment to his Accounts Office to enable the latter to make a suitable note in his records.

(ii) In the case of loans sanctioned to parties other than State and Union Territory and Foreign Governments and Government Servants, the borrower should tender the amounts due on or before the due date, at the New Delhi Office/Main Office of the public sector bank accredited to the Ministry/ Department which sanctions the loan, in cash or by cheque or draft drawn on any scheduled bank in Delhi/New Delhi in favour of the said PSB Branch. The payment should be accompanied by a memorandum or challan in duplicate indicating (a) name of the loan sanctioning Ministry/Department; (b) No. and date of the loan sanction letter and the loan amount sanctioned; (c) amount due for payment separately for interest and principal and the head(s) of account to
which the dues are to be credited in the Government Accounts; and (d) due date of payment. The borrower should be asked to tender separate chequ Outstation loanees are required to arrange the dues through their bank ensuring that the memorandum/challan and the cheque/draft reaches the aforesaid PSB Branch in New Delhi by the due date.

(iii) Ministries/Departments are required to keep closeWATCH on timely repayments of loans advanced by them and recovery of interest thereon. Rule 220 (1) (viii) of G.F.R. 2005 provides for a notice to be given to the borrowers a month in advance of the due date of payment of instalment of the principal and/or interest thereon. Such notices may be sent in the form given in Appendix II. The borrower should not however be given any advantage in the event of non-receipt of such a notice. Repayments/interest payments due from the loanees should also be reviewed at least quarterly, and where any default has occurred, a fresh notice should be served on the borrower to arrange payment with penal/higher rate of interest in the form set out in Appendix III.

(iv) Individual cases relating to terms and conditions of loans need not be referred to the Department of Economic Affairs (Budget Division) unless it is proposed to deviate from those laid down in
this Office Memorandum.

This issues with the approval of Finance Minister.

(Vyasan R)
Deputy Secretary (Budget)



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