THE
JHARKHAND GAZETTE
EXTRAORDINARY
PUBLISHED BY AUTHORITY
27 MAGH 1947 (S)
RANCHI MONDAY 16TH FEBRUARY, 2026
FINANCE DEPARTMENT
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NOTIFICATION
21ST November,
2025
Scheme for Constitution and Administration of the
Guarantee Redemption Fund of Government of Jharkhand
Memo : Artho (30)-13/2020,787/Budget--
No. : 509 /Budget
Dated: 11.07.2024
Title of the Scheme 1
The Scheme shall be called ‘Guarantee Redemption
Fund (hereinafter referred to as 'the Fund’) Scheme of
the Government of Jharkhand.
Constitution of
the
Fund
2
A ‘Guarantee Redemption Fund’ shall be constituted by
the Government of Jharkhand (hereinafter called the
Government) for meeting its obligations arising out of the
Guarantees issued on behalf of State Level Public Sector
Undertakings or Other Bodies.
The Fund shall be constituted in the Public Account and
classified under the head “8235–General and Other
Reserve Funds -117- Guarantee Redemption Fund” in
the accounts of the Government.
No. 53
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Jharkhand Gazette (Extraordinary) Monday 16th February, 2026
Objective
of
the
Scheme
3
The Fund shall be utilised for meeting the payment
obligations arising out of the guarantees issued by the
Government in respect of bonds issued and other
borrowings
by
the
State
Level
Public
Sector
Undertakings or Other Bodies and invoked by the
beneficiaries.
Explanation
(a)
The accumulations in the Fund shall be utilised only
towards the payment of the guarantees issued by the
Government and invoked by the beneficiary and not paid
by the institution on whose behalf guarantee was issued.
(b)
The State can avail of short-term accommodation under
Special Drawing Facility (SDF) from Reserve Bank of
India (hereinafter referred to as ‘the Bank’) against the
collateral of investment made in GRF for meeting
temporary cashflow mismatches, subject to the terms
and conditions as fixed by the Bank from time to time.
Commencement
of
the Operation of the
scheme
4
The Scheme shall come into force with effect from the
date of the notification.
Contributions to the
Fund
5
(a) The Government should make conscious efforts
towards building up the GRF corpus to five per cent of
the outstanding guarantees within a span of five years
from the date of constitution of the Fund.
(b) It is open to the Government to increase the
contributions to the Fund at its discretion and also based
on its assessment of likely invocation of guarantees. The
balance in the Fund shall be increased with periodic
contributions made annually or at shorter intervals.
(c) In order to enable transfer of the total amount of
contribution to the Fund, the Government would make
suitable
Budget
provision
under
the
Revenue
Expenditure side of the budget under the head “-
2075 – Miscellaneous General Services – 797 - Transfer
to/ from Reserve Fund and Deposit Account- Guarantee
Redemption Fund”.
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Jharkhand Gazette (Extraordinary) Monday 16th February, 2026
(d) The Government shall not fund its contribution to the
Fund out of borrowings from the Bank.
Relationship of
the
Fund with General
Revenues
/ Public
Account
6
(a) The corpus of the Fund comprises an initial amount
demarcated by the Government, annual or other
contributions made by the Government thereto as also
periodic accretions by way of Guarantee Commission to
be collected from the institutions in respect of whose
bonds / obligations Government will issue the
guarantees, in addition to the income accruing to the
Fund.
(b) The Fund shall be kept outside the General Revenues
of the Government and shall be utilized only in the
manner prescribed in this Scheme.
Administration
of
the Fund
7
The Fund shall be administered by Central Accounts
Section of the Bank subject to such directions/
instructions as the Government may issue from time to
time.
Investment
of
the
corpus of the Fund
8
The accretions to the Fund together with the income
earned on the investment of the Fund shall be invested
in Government of India (GoI) Dated Securities, Treasury
Bills, Special Securities of the GoI and State Government
Securities of other States of such maturities as the Bank
may determine from time to time. The Bank shall make
available the securities for investment either from its
investment portfolio or by acquiring the securities from
the secondary market, without loading any charge other
than that indicated in paragraph 11.
Accounting of
Transactions
9
(a) The responsibility for the administration of the Fund
will rest with the Government. The Government will
decide all matters connected with the investment of the
corpus of the Fund, reinvestment/dis-investment,
obligations and application of the Fund, etc.
(b) The Government will, from time to time, issue
instructions to the Bank. The Bank will immediately
arrange to make the necessary investment. The Bank
would scroll to the Government the debit on account of
the investment and other incidental charges like
brokerage, commission, etc. in the usual course.
However, in order to ensure that the investment
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Jharkhand Gazette (Extraordinary) Monday 16th February, 2026
transactions of the Fund do not get mixed up with other
transactions, these may be indicated distinctly in
separate scrolls.
(c) On receipt of the scrolls the investment transactions
would be accounted for under the head “8235- General
and
Other
Reserve
Funds
–117-
Guarantee
Redemption Fund Investment Account”. However, the
incidental charges like brokerage, commission, etc., shall
be accounted for as a charge on the Fund.
(d) The Bank will arrange to collect interest on these
securities and credit the same to the Fund on due date.
Further, these would require to be invested as in the case
of the contributions by the Government i.e., in
accordance with the investment norms prescribed in
para 8 above.
(e) On maturity of the securities, the proceeds will be
collected and credited to the account of the Government
or reinvested in accordance with the pattern outlined in
para 8 above on the basis of instructions received from
the Government. As in the case of the debit scrolls, the
Bank shall use separate scrolls, for the receipts.
(f) On receipt of instructions from the Government, the
Bank will arrange to sell the securities at the ruling price
and credit the amount realized, less incidental charges,
to the account of the Government. If these securities are
in loss, Bank may in consultation with the Government
decide on the securities to be liquidated.
(g) The receipts on account of maturity or sale of the
securities would be taken into the account of the
“Guarantee Redemption Fund Investment Account”.
The incidental charges on sale would be charged to the
Fund.
(h) The provision for expenditure on account of the
Guarantee Redemption will be made in the budget of the
Government under the relevant heads. Only the actual
amount of guarantee redemption expenditure shall be
brought in account under the Revenue Expenditure
Head “2075-Miscellaneous General Services -800-Other
Expenditure-payment of guarantee value invoked.”
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Jharkhand Gazette (Extraordinary) Monday 16th February, 2026
(i) The Bank shall arrange to redeem the securities on
maturity. In case of premature disinvestments to meet
the liability on account of the claims to be paid, the Bank
shall decide on the securities to be liquidated and sell the
securities at the ruling price and credit the amount
realised, less incidental charges, to the Government
account. If these securities are in loss, Bank may in
consultation with the Government decide on the
securities to be liquidated.
(j) The Government will pay the Bank, a commission at
the rate determined by the Bank in consultation with the
Government. These charges shall also be borne by the
F u n d as in the case of the charges indicated in paras 9(c)
and 9(g). The loss or gain on the sale of securities shall
also be taken to the Account of the Fund.
Explanation
(a) The debit to Government on account of such
withdrawal will be accounted under the major head
“8235-General and Other Reserve Fund-117- Guarantee
Redemption Fund–Investment Account”. On the maturity
of the loan the balance outstanding under the head 8235-
General
and
Other
Reserve
Fund-120-Guarantee
Redemption Fund-Investment Account is credited to the
Head “8680-Miscellaneous Government Account-Ledger
Balance Adjustment Account”.
(b) The Bank would scroll to the Government the debit
on account of investment less the incidental charges in
the usual course. However, in order to ensure that the
investment transactions of the Fund do not get mixed up
with other transactions, these will be indicated distinctly
in separate scrolls.
(c) The Bank will arrange to collect interest on the
investments and credit the same to the Fund on the due
dates.
(d) On the maturity of the securities, the Bank will
arrange to redeem the securities and in case of
premature disinvestment, to sell the securities at the
ruling price and credit the amount realised, less
incidental charges to the Guarantee Redemption Fund
Investment Account. As in the case of debit scrolls, the
Bank shall use separate scrolls for the receipts.
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Jharkhand Gazette (Extraordinary) Monday 16th February, 2026
(e) The provision for expenditure on account of the
periodic contributions will be made in the Budget of the
Government under the relevant head. The extent of
expenditure to be financed from the Fund shall be
withdrawn from the Fund by the disposal of the
investment.
Functions
of
the
Bank managing the
Fund
10
(a) The Bank will be guided by the directions of the
Government in all matters concerning the investment /
reinvestment
/
dis-investment
/
reallocation
/
withdrawals time to time of the Fund and will act
accordingly.
(b) The Bank would arrange to raise a debit to the
account of the Government maintained with it as per the
schedule of contributions set out in paragraph 5.
(c) The contributions to the Fund shall be invested by the
Bank as indicated in paragraph 8. The periodic accretion
to the Fund by way of guarantee commission,
contributions by the Government and interest income
shall also be invested by the Bank in a similar manner.
(d) 50 per cent of the outstanding corpus held in the GRF
as on March 31 of the preceding financial year, or the
amount of guarantees invoked during the year (April –
March), whichever is less, should be reckoned for
arriving at the maximum eligible limit for withdrawal
from the GRF during the year. The Government will
replenish the corpus before seeking the next withdrawal.
(e) The Bank will submit periodical statement of balances/
advices regarding the changes therein in consultation
with the Government.
Service charges for
administration
of
the Fund
11
The Government will pay to Bank a commission at the
rate of 1/8 per cent of one per cent of the turnover of the
Fund or at the rate to be mutually decided from time to
time.
Account and Audit
12
The accounts of the Fund and the investments shall be
maintained by the Accountant General of the State in the
normal course. The concerned Department of the
Government will maintain subsidiary accounts in such
manner and detail as may be considered by the
Government in consultation with the Accountant
General.
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Jharkhand Gazette (Extraordinary) Monday 16th February, 2026
Savings
13
The Government shall issue instructions relating to the
provisions of the Scheme as may be considered from
time to time to enable smooth functioning of the Scheme.
In case of any difficulty in the operation of any provision
of the Scheme, the Government may, if satisfied, relax
the provisions.
By order of the Governor of Jharkhand,
Prashant Kumar,
Secretary to Government.
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Printed & Published by the Superintendent of Jharkhand Government Press, Doranda, Ranchi.
Jharkhand Gazette (Extraordinary) 53-- 50.