3. Discharge of Certificates by the investors
(i) As per Regulation 24 (2) (b) of Government Securities Regulations, 2007, (copy of which was forwarded to you vide our letter DGBA.CDD.H-6289/11.29.002/2007-08 dated December 7, 2007) payment of maturity proceeds to the registered holder of a Government Security, held in the form of BLA shall be made by pay order or by credit to the account of the holder in any bank having facility of receipt of funds through electronic means. For this purpose, in terms of Regulations 24(2) (d) bond holders are required to submit relevant particulars of their bank account to the Agency banks. This regulation in effect obviates the necessity of the investor submitting Annexure 1A seeking repayment of bonds and enables Agency banks to automatically redeem the matured bonds on due date and despatch the payment advice. To facilitate the automatic redemption on due dates, holders of BLAs whose bank account details are not available with you, may be asked to furnish the relevant particulars and a mandate as per Annexure 1B (copy enclosed) for crediting the proceeds electronically to their account. It may also be noted that in the absence of mandate, repayment will be made on receipt of discharge in Annexure 1A, as hitherto.
(ii) As per extant instructions, the investor is required to furnish the particulars of his PAN / GIR number, or a declaration in Form No. 60, in case the investor does not have PAN / GIR No, if the amount of repayment exceeds Rs. 1 lakh.
4. Payment to the Investors
(i) Although the Receipt (Annexure 1A) is submitted well in advance for repayment, it should be ensured that actual payment of discharge value is made only on the due date, and if payment is made through electronic mode, the investor’s account should be credited on due date only and not before that. In the event of holiday being declared by the State Government under the Negotiable Instruments Act, 1881 on the maturity date or maturity date being Sunday, the maturity proceeds may be made on the previous working day.
(ii) The repayment should be made only by the bank branch concerned, maintaining the BLA. Details of closure of the investment(s) i.e. date(s) and amount(s) etc. should be maintained and invariably be indicated in the BLA, wherever applicable duly authenticated by the Supervising Official.
(iii) If multiple investments are made against the same BLA, the redemption of individual investment should be reflected therein and a fresh statement of holding duly indicating the BLA number, date of maturity and amounts in respect of individual investments may be generated and given to the investor. It should be ensured that the outstanding balance appearing in the BLA and the statement of holding are the same.
5. Delivery of Payment Order: In case of repayment by issuance of Payment Order it should be ensured that the payment orders bearing the dates of redemption are prepared and kept ready / despatched (in case of request to send by post) so as to reach the holder at least one day in advance and for senior citizens, three days in advance. The payment order may be despatched by speed/registered post.
6. Interest payments: As regards investments held under non-cumulative scheme, the interest for the broken period/last half-year should be paid along with the principal, if bank account details are available or duly discharged bond is submitted well in advance. If bank account details are not available or duly discharged bond is not submitted well in advance by the investor, then the interest warrants for the broken period / last half-year pertaining to such investments should be despatched on the due date of maturity. While despatching such interest warrants of matured investments, the covering letter addressed to the investor should invite his attention to maturity intimation advice issued in terms of para 1 above and indicate that the investment has matured on the specific date. As regards payment of interest on investments held under cumulative scheme, interest on bond should be paid along with the principal. The advices to the investors should invariably contain the legend “Interest will not accrue on the investment after ----/ ----/ ---- (date of maturity)”.
7. Accounting: The Principal and the interest should be separately accounted for and the scrolls drawn separately and kept on records for audit / verification in terms of the extant instructions issued from time to time.
8. Reporting to Government of India: The designated branches should submit a statement showing the payments and outstanding in respect of the BLAs under the scheme on monthly basis to the Controller of Accounts, Department of Economic Affairs, Ministry of Finance, Government of India, New Delhi through their Link Office. The repayment scrolls pertaining to the principal and the interest should be drawn separately as per Appendix XI & XII of MOP for this purpose.
9. Reporting to PDO of jurisdiction: The monthly report sent to the PDO of jurisdiction should invariably contain the details of repayments in part D of Appendix IV. The repayment scrolls pertaining to the principal and the interest drawn separately as per Appendix XII of MOP for the month as above may also be submitted alongside.
10. Reimbursement from CAS Nagpur: The Agency banks may prefer claims for reimbursement as per paragraph 1.14 and 1.18 (section I) of MOP only in respect of the repayments effected by them. Such claims may be submitted in the usual manner to CAS, Nagpur through the respective link cells along with the consolidated scrolls separately for principal and interest. The claims should be duly supported by a certificate from the Internal / Concurrent Auditors to the effect that the repayment figures have been checked 100% and that the amount has already been paid to the investors.
11. Preservation of Records: The instructions vide paragraph 1.22 of MOP regarding preservation of records should be followed meticulously.
12. Advice to designated Banks: Since most of the branches have computerized their operations, the requisite system changes required to comply with the above instructions, may please be made well in advance to avoid any hassles at the operational level and to render better customer service to the investors. The contents of this circular may please be brought to the notice of the designated branches concerned urgently.
13. The above instructions are illustrative and not exhaustive and should be read with the instructions in the MOP, Government Securities Act, 2006 and Government Securities Regulations, 2007. In case of any specific doubts or queries on the above, the designated banks / branches may please contact the PDO of jurisdiction.
14. Please acknowledge receipt and monitor compliance.