Compendium of Rules on Advances to Government Servants

Compendium of Rules on Advances to Government Servants

FOREWORD

GFRs, 2005 take effect from July 1, 2005. Provisions relating to advances have been excluded from these GFRs as powers and conditions for grant of advances to government servants are distinct from those relating to direct government expenditure. For the sake of convenience of the government employees and facilitated referencing, the relevant provisions dealing with advances are being issued separately in this Compendium. It is expected that the Compendium will prove useful to the government employees.

New Delhi,

July 1, 2005.

(Adarsh Kishore)

Secretary to the Govt. of India

Ministry of Finance

Department of Expenditure

Compendium of Rules on Advances to Government Servants

I. GENERAL

Rule 1 A competent authority may grant advances from public funds in accordance with the provisions contained in this Compendium.

Rule 2 The competent authority shall charge simple interest at such rates as may be specified by the Ministry of Finance from time to time for this purpose.

GOVERNMENT OF INDIA’S DECISIONS

(1) Rate of interest in cases under Rules 15 to 38-F. -In cases of advances regulated by Rules 15 to 38-F, sanctions to be issued by the competent authority/agreement to be executed by the Government servant at the time of drawing of advance sanctioned to him should provide for recovery of interest at 2½ % above the prescribed rate with the stipulation that if conditions attached to the sanction, including those relating to the recovery of amount, are fulfilled completely to the satisfaction of the competent authority, rebate of interest to the extent of 2 ½ % will be allowed.

(2) In cases regulated under Rules 39 to 84.-In case of advances regulated by Rules 39 to 84, sanctions to be issued by the competent authority/agreements to be executed at the time of drawing of advance should stipulate that no interest shall be chargeable if the conditions attached to the sanction, including those relating to the recovery of amount, are complied with fully to the satisfaction of the competent authority. However, in case of default, interest @ 2 % (two per cent) over the interest rate which is allowed by the Government on the Provident Fund balances of its employees shall be charged in the following cases:

(i) in cases where the advance is not utilized fully but the adjustment bill is submitted in time, interest may be charged as stated above on the unutilized portion of advance from the date of drawal of advance to the date of refund.

(ii) in cases where the adjustment bill is not submitted within the prescribed time, th entire amount of advance may be recovered one lump sum immediately on expiry of such time. In such cases also, the interest may be charged as mentioned above on the entire amount of advance from the date of drawal to the date of recovery of amount.

The claim of the Government servant for reimbursement would, however, not be forfeited merely on account of recovery of advance.