Rule 247 of The General Financial Rules 2017 Powers and Procedure for sanction of loans
Original Rule Text
Visual Summary
Central Government Departments, Administrators, and subordinate authorities.
Delegation of Financial Powers Rules and related orders.
Budget Division, DEA, Ministry of Finance is the nodal division.
Executive Summary
Rule 247 of the General Financial Rules, 2017, outlines the powers and procedures for sanctioning loans by the Central Government. It specifies that various authorities, including Central Government Departments, Administrators, and subordinate bodies, are empowered to sanction loans as per the Delegation of Financial Powers Rules. Crucially, the Budget Division within the Department of Economic Affairs, Ministry of Finance, is designated as the nodal authority responsible for finalizing the terms and conditions of these Central Government loans.
In-Depth Analysis of the Rule
Rule 247 provides the foundational framework for how loans are sanctioned within the Central Government. It delineates the authorities responsible and highlights the central role of the Ministry of Finance in setting the overarching conditions for such financial instruments.
Breakdown of the Rule:
- Sub-rule (1) – Sanctioning Powers: This sub-rule clarifies that the authority to sanction loans is vested in various entities, including Departments of the Central Government, Administrators (likely of Union Territories), and other subordinate authorities. These powers are not arbitrary but are exercised in accordance with the ‘Delegation of Financial Powers Rules’ and other specific or general orders. This ensures a structured and legally compliant approach to loan approvals.
- Sub-rule (2) – Nodal Authority for Terms: This is a critical provision, designating the Budget Division, Department of Economic Affairs, Ministry of Finance, as the central point for finalizing the terms and conditions of all Central Government loans. This centralization ensures consistency, adherence to fiscal policy, and comprehensive oversight of the government’s lending activities.
Practical Example:
Imagine a Central Government Department wants to sanction a loan to a Public Sector Undertaking for a new infrastructure project. According to Rule 247(1), the Department has the delegated power to initiate this. However, before the loan can be finalized, Rule 247(2) mandates that the specific terms and conditions of this loan (e.g., interest rate, repayment schedule, collateral requirements) must be reviewed and finalized by the Budget Division of the Department of Economic Affairs, Ministry of Finance. This ensures that even though a department can sanction a loan, the financial parameters are centrally controlled and aligned with broader government fiscal policy.
Related Provisions
Rule 247 is closely related to other provisions governing financial powers and loan management:
- Rule 246 of The General Financial Rules, 2017: Sanction of Loans to Various Entities – This rule sets the scope for all authorities competent to sanction loans of public moneys to various entities.
- Rule 248 of The General Financial Rules, 2017: Loan Sanction Certificate – This rule mandates that all loan sanctions must include a certificate confirming adherence to Ministry of Finance principles and approval of interest rates and repayment periods.
- Rule 249 of The General Financial Rules, 2017: Terms and Conditions of Loans – This rule specifies that all loan sanctions must adhere to the Delegation of Financial Powers Rules and clearly define repayment and interest terms.
Learning Aids
Mnemonics:
- Powers And Nodal Division Sanction Loans: Helps remember the key aspects of Rule 247 – Powers, Administrators, Nodal Division (Budget Division), Sanction, Loans.
Process Flowchart:
Multiple Choice Questions
1. What primary document governs the powers of authorities to sanction loans under Rule 247 of the General Financial Rules, 2017?
- A) Treasury Rules
- B) Delegation of Financial Powers Rules
- C) Government Accounting Rules
- D) Public Account Rules
Show Answer
Correct Answer: B) Delegation of Financial Powers Rules
2. Which division is designated as the nodal authority for finalizing loan terms and conditions by the Central Government, according to Rule 247(2) of the General Financial Rules, 2017?
- A) Department of Expenditure
- B) Budget Division, Department of Economic Affairs
- C) Controller General of Accounts
- D) Ministry of Corporate Affairs
Show Answer
Correct Answer: B) Budget Division, Department of Economic Affairs
3. Rule 247(1) of the General Financial Rules, 2017, states that powers to sanction loans are given to which of the following?
- A) Only Central Government Departments
- B) Only Administrators of Union Territories
- C) Central Government Departments, Administrators, and subordinate authorities
- D) Only the Ministry of Finance
Show Answer
Correct Answer: C) Central Government Departments, Administrators, and subordinate authorities
4. The terms and conditions of loans by the Central Government are finalized by the nodal division in which Ministry, as per Rule 247(2) of the General Financial Rules, 2017?
- A) Ministry of Home Affairs
- B) Ministry of Defence
- C) Ministry of Finance
- D) Ministry of External Affairs
Show Answer
Correct Answer: C) Ministry of Finance
5. What type of orders, besides the Delegation of Financial Powers Rules, also govern the sanctioning of loans under Rule 247(1) of the General Financial Rules, 2017?
- A) Only special orders
- B) Only general orders
- C) General and special orders
- D) Parliamentary resolutions
Show Answer
Correct Answer: C) General and special orders
Frequently Asked Questions
Who has the authority to sanction loans under Rule 247 of the General Financial Rules, 2017?
The authority to sanction loans is vested in Departments of the Central Government, Administrators, and other subordinate authorities, as per the Delegation of Financial Powers Rules and other relevant orders.
What is the role of the Ministry of Finance in loan sanctioning as per Rule 247(2) of the General Financial Rules, 2017?
The Budget Division, Department of Economic Affairs, Ministry of Finance, acts as the nodal division responsible for finalizing the terms and conditions of loans sanctioned by the Central Government.
Are there specific rules that govern the delegation of financial powers for loan sanctions under Rule 247 of the General Financial Rules, 2017?
Yes, the powers are specifically given in the Delegation of Financial Powers Rules, along with other general and special orders issued under that rule.
Key Takeaways
- Rule 247 defines the authorities (Central Government Departments, Administrators, subordinate authorities) empowered to sanction loans.
- These powers are exercised in accordance with the Delegation of Financial Powers Rules and other specific orders.
- The Budget Division, Department of Economic Affairs, Ministry of Finance, is the nodal body for finalizing loan terms and conditions.
- The rule ensures a centralized and consistent approach to government lending policies.
Conclusion
Rule 247 of the General Financial Rules, 2017, is fundamental to understanding the governance of public loans. By clearly delineating sanctioning authorities and centralizing the finalization of loan terms within the Ministry of Finance, it establishes a robust framework for financial accountability and strategic fiscal management within the Central Government.