THE GAZETTE OF INDIA : EXTRAORDINARY

[PART II—SEC. 3(i)l

MINISTRY OF FINANCE

(Department of Economic Affairs)

NOTIFICATION

New Delhi, the 27th February, 2001

G.S.R. H4(E).— The National Small Savings Fund (Custody and

Investment) Rules, 2001 made by the President in exercise of the powers

conferred by clause (1) of article 283 of the Constitution of India, are

hereby published for general information.

PREAMBLE

In exercise of the powers conferred by clause (1) of article 283 of

the Constitution, the President hereby makes the following rules regulating

the custody of the Consolidated Fund of India and the Contingency Fund of

India, the payment of moneys into such Funds, the withdrawal of moneys

therefrom, the custody of public moneys other than those credited to such

Funds received by or on behalf of the Government of India, their payment

into the Public Account of India and the withdrawal of moneys from such

account and other matters connected therewith or ancillary thereto,

namely - the National Small Savings Fund (Custody and Investment)

Rules, 2001.

PART I - INTRODUCTORY

Short title and commencement.- (1) These rules may be called the

National Small Savings Fund (Custody and Investment) Rules, 2001.

(2)

These shall be deemed to have come into force on the 1^st day of

April, 1999.

Definitions.- In these rules, unless the context otherwise requires,-

(a)

"Net Collection" means the amount arrived at by deducting

the amount of withdrawals by subscribers from the amount of

deposits under a Small Savings Scheme during a given period;

(b)

"Net Collections in a State or Union territory" means the

amount arrived at by deducting the amount of withdrawals by

subscribers in a State or Union territory from the amount of

deposits in the said State or Union territory under a Small

Savings Scheme during a given period;

(c)

"Securities'⁷ means the Special Securities issued by the

Central Government or a State Government for the purpose of

investment of small savings collections.

(d)

"Smalt Savings Scheme" means - (i) Post Office Savings

Bank Deposits regulated under the Government Savings Banks

Act, 1873; (ii) Savings Certificates Issued under the

Government Savings Certificates Act, 1959; (iii) Public

Provident Fund scheme regulated under the Public Provident

Fund Act, 1968; and (iv) any other scheme as may be notified

by the Central Government from time to time;

(e)

"Subscriber" means a depositor or holder or subscriber as

referred to in the relevant Act, sub-rule (d);

(f)

"Public account of India" means the public account of India

referred to In clause (2) of Article 266 of the Constitution;

(g)

"Reserve Bank of India" means any office or branch of the

Banking Department of the Reserve Bank of India constituted

under the Reserve Bank of India Act, 1934 (I of 1934).

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THE GAZETTE OF INDIA EXTRAORDINARY

[PARI II—Sn- 1(.)|

Constitution of National Small Savings Fund.- There shall be

constituted a Fund to be called the National Small Savings Fund to

which shall be credited all collections under the Small Savings

Schemes in the public account of India.

Utilisation of the fund.- The Fund shall be invested in the

securities of the Central and State Governments In such ratio as are

specified in these rules.

Receipts of the fund.- (1) The fund shall have the following receipts :-

(a)

Deposits or payments or subscriptions or repayments of loans

and interest by subscribers Into the Small Savings Schemes;

(b)

Amount realised on discharge of investments made from the

Fund Into the Central and State Government securities;

(c)

The Interest received on investment made from the Fund into

the Central and State Government securities; and

(d)

Other receipts, grants and/or contributions received from the

Central and/or State Governments, if any.

Disbursements out of the Fund.- (1) The fund shall have the following

disbursements :-

(a)

Payments, including grant of loan as admissible, to/or

withdrawals by the subscribers from the Small Savings

Schemes;

(b)

Investments made In the Central and State Government

securities;

(c)

Interest payable to the subscribers under the Small Savings

Schemes;

(d)

Incidental expenditure towards management of Small Savings

Schemes excluding the expenditure on National Savings

Organisation and any other expenditure related to the

operations of the Fund.

PART I I - OPERATIONS OF THE FUND

Deposits etc., withdrawals etc, and payment of Interest.-

Deposits into, withdrawals from and disbursement by way of Interest

etc. as the case may be under the Small Savings Schemes shall be

regulated In accordance with the provisions of the Acts or Rules

governing them as may be In force from time to time.

Accounting.- All transactions relating to the Small Savings Schemes

shall be accounted for under the public account of India as specified

In the accounting procedure in Part III of these rules.

However,

these transactions shall be disclosed in the Annual Budget

Documents as well as in the Union Finance Accounts.

Investment.- (1) Sharing of Net Collections between Centre

and States.- Such percentage of the net collections under all the Small

Savings Schemes as may be determined by the Central Government

from time to time shall be invested In the Central Government and State

Government securities:

Provided that the Investment in the securities of a particular

State Government shall be based on the net collections in that

State.

(2)

Investment of net collections in the securities of the Central

and State Governments shall be made every month or at such

other Intervals as may be necessary.

(3)

The terms and conditions of the securities eligible for

Investment from National Small Savings Fund shall be decided

by the Central Government.

(4)

The Secretary, Department of Economic Affairs, Ministry of

Finance, of the Central Government or an officer authorised by

him shall Issue necessary sanction Indicating the name of the

State or Union territory and the amount of investment to be

made In their securities and also the amount to be invested in

the Central Government securities as and when necessary.

(5)

In case the investment is being made in the State Government

securities, the Chief Controller of Accounts, Ministry of Finance

shall on receipt of the sanction referred to in the sub rule (4),

issue an advice on the Reserve Bank of India, Central

THE GAZETTE OF INDIA : EXTRAORDINARY

[PARI II—SEC. 3(i)|

Accounts Section, Nagpur authorising them to debit the

Central Government account for the specified amount.

Simultaneously, Chief Controller of Accounts will account for

the amount of the advice Issued in his books by debiting the

National Small Savings Fund account "(8007 - Investments of

National Small Savings Fund) per contra credit to 8658 -

Suspense Accounts/110/Reserve Bank Suspense - Central

Accounts Office."

On receipt of the confirmation of the

transaction from Reserve Bank of India, Chief Controller of

Accounts shall clear the Suspense Head by reversing the entry

and crediting "8675 - Deposits with Reserve Bank."

(6)

In case the investment is being made in the Central

Government securities, the Chief Controller of Accounts,

Ministry of Finance on receipt of the sanction referred to in

sub rule (4) above shall issue an advice on the Reserve Bank

of India, Central Accounts Section, Nagpur authorising them to

invest the amount in Central Securities. Reserve Bank of India,

on completion of transaction, shall send a debit and credit

scroll to Chief Controller of Accounts, Ministry of Finance.

These scrolls shall be accounted for under "8007

Investments of National Small Savings Fund and 6001 -

Internal Debt/122 - Special Central Government Securities

issued against net collections of small savings from the 1^st

April, 1999."

(7)

The normal procedure followed in the case of the Central or

State securities shall also be applicable to the Special

Securities.

(8)

Interest on Investments.- Reserve Bank of India shall

collect the interest on the securities from the issuer on the due

dates and credit the same to the account of Department of

Economic Affairs,

Ministry of Finance of the Central

Government.

(a)

In case of the State Government securities, on receipt

of this advice from Reserve Bank of India, the Chief

Controller of Accounts shall debit In his books "8675 -

Deposits with Reserve Bank by crediting 8008 - Income

and Expenditure of National Small Savings Fund."

(b)

In case of the Central Government securities, on receipt

of this advice from Reserve Bank of India, the Chief

Controller of Accounts shall debit in his books "2049 -

Interest Payments, 01- Interest on Internal Debt, 121-

Interest on Investment in Special Central Government

Securities issued against outstanding balances of small

savings as on the 31^st March, 1999 and 122 - Interest

on Investment in Special Central Government Securities"

issued against net collections of small savings from the

st April, 1999 by crediting "8008 -

Income and

Expenditure of National Small Savings Fund," as the

case may be.

(9)

On maturity of securities, Reserve Bank of India shall collect

the amount due from the issuers of the securities and credit

the same to the account of Department of Economic Affairs,

Ministry of Finance of the Central Government. In the case of

the State Government securities, Reserve Bank of India shall

send necessary receipt scroll to Chief Controller of Accounts,

Ministry of Finance, Department of Economic Affairs, who shall

account for it under "8007- Investments of National Small

Savings Fund" with contra debit to "8675-Deposits with

Reserve Bank".

In the case of the Central Government

securities, a credit and debit scroll would be sent which would

be accounted for under "8007-Investments of National Small

Savings Fund" and "6001-Internal Debt" respectively.

(10) The amount received on maturity of the investments shall

devolve on the Central Government and accordingly, they shall

be invested in the Central Government securities.

Such

securities shall also be issued on the same terms and

conditions as in the case of securities against the Central

Government's share of net collections. Suitable accounting

entries as mentioned in sub-rule 6 shall be made by Chief

Controller of Accounts, Ministry of Finance.

10.

Investment of outstanding balances as on the 31^st March,

1999.- The fund shall also comprise of the outstanding balances

under all the Small Savings Schemes as on the 31^st March, 1999, the

amount of which shall be invested in the "Central Government

Special Securities" to be issued for this purpose. The accounting

procedure for these securities shall be the same as mentioned In

sub-rule 6 of rule 9 for other 'Central Government Special Securities

issued against net collections of small savings from the 1^st April,

1999'.

THE GAZETTE OF INDIA ; EXTRAORDINARY

[PART II—SEC, 3(i)|

PART I I I - ACCOUNTING PROCEDURE

11.

National Small Savings Fund.- A distinct sub-sector called

"National Small Savings Fund" shall be opened in the public account

of India for the purposes of accounting the transactions relating to

small savings. The sub-sector "National Small Savings Fund" shall

comprise of the following Major Heads :

(1)

Major Head : 8001 - Savings Deposits;

(2)

Major Head : 8002 - Savings Certificates;

(3)

Major Head : 8006 - Public Provident Fund;

(4)

Major Head : 8007 - Investments of National Small Savings

Fund; and

(5)

Major Head: 8008-Income and Expenditure of National Small

Savings Fund.

12.

Deposits and withdrawals by subscribers under Small

Savings Schemes. -

(1)

The account of

deposits and withdrawals by subscribers

under Small Savings Schemes shall be maintained In the public

account of India as per the following details, namely:-

(a)

Savings Deposits under "Major Head - 8001 Savings

Deposits";

(b)

Savings Certificates under "Major Head - 8002 Savings

Certificates - Minor Head 101 Post Office Certificates"

for savings Certificates issued prior to the 1^st April, 1999

and "Minor Head - 107 Post Office Certificates (new

series) for Savings Certificates issued on or after the 1^st

April, 1999;

(c)

Public Provident Fund under "Major Head - 8006 Public

Provident Fund".

13.

Interest Payments.- Interest payments to subscribers shall be

debited to "Major Head - 8008 Income and expenditure of National

Small Savings Fund; Sub Major Head - 02 Interest Payments to

Subscribers". Separate minor heads would be used to account for

the interest paid on every Small Savings Scheme as per the following

details, namely:-

(1)

Minor Head 101 - Interest on Savings Deposits;

(2)

Minor Head 102 - Interest on Savings Certificates;

(3)

Minor Head 103 - Interest on Public Provident Fund; <W-

(4)

New Minor Heads may be opened as and when required.

14. Investments.-

(1)

Securities issued against investment of outstanding balances

under all the Small Savings Schemes as on the 31^st March,

1999 shall be accounted for under the "Major Head - 8007

Investments of National Small Savings Fund - Minor Head -

101 Investment in Central Government Special Securities

against outstanding balances as on the 31^st March, 1999".

(2)

Investments made in the Securities of Central Government

against collections from the 1^st April, 1999 shall be accounted

for under "Major Head - 8007 Investments of National Small

Savings Fund Minor Head - 102 Investments in the Central

Government Special Securities against collections from the 1^st

April, 1999".

(3)

Investments made in the Securities of State Governments shall

be accounted for under "Major Head - 8007 Investment of

National Small Savings Fund; Minor Head - 103 Investment in

Special State Government Securities". Names of each State

Government shall appear as a distinct sub-head under this

minnr hpari.

15.

Interest earned on Investments* - Interest earned on

Investments shall be accounted for under "Major Head - 8008

Income and Expenditure of National Small Savings Fund; Sub-Major

Head - 01 Income from Investments of small savings collections".

Separate minor heads shall be used as per the following details,

namely:-

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART II—SEC, 3(i)l

(a)

Minor Head 101-Interest on Investments in Special Central

Government Securities against outstanding

balances as on the 31^st March, 1999;

(b)

Minor Head 102-Interest on Investments in Special Central

Government Securities against collections

from the 1^st April, 1999;

(c)

Minor Head 103-Interest on Investment in Special State

Government Securities.

16.

Expenditure

towards

management

Small

Savings

Schemes.- Expenditure towards management of Small Savings

Schemes shall be accounted for under "Major Head 8008 - Income

and Expenditure of National Small Savings Fund - Sub-Major Head

03-Management Cost".

Separate Minor Heads shall be used for

every type of expenditure as per the following details, namely:-

(a)

Minor Head - 101 Payment of agency charges to Department

of Posts;

(b)

Minor Head - 102 Payment of agency charges to Public Sector

Banks;

(c)

Minor Head -103 Payment of agency commission to agents;

(d)

Minor Head -104 Cost of Printing;

(e)

New Minor Heads shall be opened as and when required.

PART IV - MISCELLANEOUS

17.

Interpretation.- Where any doubt arises as to the interpretation of

any of the provisions of these rules, the matter shall be referred to

the Central Government whose decision shall be final.

18.

Power to remove difficulties.- If any difficulty arises in giving

effect to any of the provisions of these rules, the Central

Government may, subject to such restrictions and conditions, if any,

as it may think fit to impose, dispense with or relax any of the

provisions of these rules.

|F, No 18-4/99-NS. II|

D SWARUR Jt Secy.

Printed In tht; Manager. Cnnt of Indifl Presi. Ring Road, Muvupun. Now Delhi-110064

and Published bj the Controller of Publications. Delhi-110054 — 2001