Rule 263 of The General Financial Rules 2017 Review of Loan Repayments and Assessment

Original Rule Text

Rule 263 (1) Review of Annual Statements with a view to enforce repayments of the principal and interest due.The Administrative Ministries shall keep watch over the receipt of the Annual Statements in Form GFR 20 regularlyfrom the Accounts Officer and conduct a close review of the cases of defaults inrepayment of the installments of principal and/or interest due, as revealed fromthese Annual Statements and takesuitable measures for enforcingrepayments of the principal and interestdue. If these statements are not receivedin time, the Accounts Officer shall bereminded promptly. To facilitate a properreview of the position of outstandingloans, the Ministries may also arrange tomaintain centrally a list of all sanctionsissued relating to loans advanced toState Governments and other entities.Rule 263 (2) Submission of Annual AssessmentReport.A copy of Annual Assessment Report onstatus of all outstanding loans, includingtimely and accurate payment of principaland interest due, shall be submitted bythe Financial Advisor of theAdministrative Ministry concerned to theMinistry of Finance by 30th June of eachfinancial year.

Visual Summary

Loan Oversight

Ministries must review annual loan statements for defaults.

Timely Action

Prompt reminders and enforcement measures are crucial for overdue payments.

Annual Reporting

Financial Advisors must submit assessment reports by June 30th annually.

Executive Summary

Rule 263 of the General Financial Rules, 2017, mandates administrative ministries to diligently monitor and enforce the repayment of loans. This involves a systematic review of annual statements for defaults, taking proactive measures to recover overdue principal and interest, and maintaining a central record of all loan sanctions. Furthermore, it requires Financial Advisors to submit a comprehensive Annual Assessment Report on outstanding loans to the Ministry of Finance by June 30th each financial year, ensuring accountability and transparency in government lending.

In-Depth Analysis of the Rule

Introduction: Rule 263 establishes a critical framework for the oversight and management of government loans, emphasizing rigorous review and timely reporting to ensure financial discipline and recovery of public funds. It outlines specific responsibilities for administrative ministries and their financial advisors in managing outstanding loans.

Breakdown of the Rule:

Rule 263 (1) – Review of Annual Statements and Enforcement:
- Administrative Ministries are responsible for monitoring the receipt of Annual Statements (Form GFR 20) from Accounts Officers.
- They must conduct a thorough review of these statements to identify any defaults in the repayment of loan principal and/or interest.
- Suitable measures must be taken to enforce repayments.
- If statements are not received on time, the Accounts Officer must be promptly reminded.
- Ministries should maintain a central list of all loan sanctions to facilitate a proper review of outstanding loans.
Rule 263 (2) – Submission of Annual Assessment Report:
- The Financial Advisor of the concerned Administrative Ministry is required to submit an Annual Assessment Report.
- This report must detail the status of all outstanding loans, including the timely and accurate payment of principal and interest due.
- The deadline for submission of this report to the Ministry of Finance is June 30th of each financial year.

Practical Example: Imagine the Ministry of Housing and Urban Affairs has advanced several loans to State Governments for urban development projects. Under Rule 263(1), the Ministry’s administrative wing must regularly check if the Accounts Officer has sent the annual statements (GFR 20) detailing these loan repayments. If a State Government misses an interest payment, the Ministry must identify this default from the statements and initiate enforcement actions, such as sending reminders or escalating the matter. Concurrently, the Financial Advisor for the Ministry, as per Rule 263(2), must compile a comprehensive report by June 30th, summarizing the status of all these urban development loans, including any defaults and the overall repayment performance, and submit it to the Ministry of Finance.

Related Provisions

To fully understand the context of loan management and repayment enforcement, consider these related rules:

Rule 262 of The General Financial Rules 2017 Annual Returns: This rule details the submission of annual returns by Principal Accounts Officers regarding outstanding central loans, providing crucial data for the review mandated by Rule 263.
Rule 258 of The General Financial Rules 2017 Defaults in Payment: This rule outlines the procedures and consequences for defaults in loan repayment, including penal interest and reporting mechanisms, which are directly relevant to the enforcement measures in Rule 263.
Rule 249 of The General Financial Rules 2017 General Conditions for Loans: This rule specifies the terms and conditions for sanctioning loans, including repayment and interest, which form the basis for the monitoring and enforcement activities described in Rule 263.

Learning Aids

Mnemonics:

Review Annual Statements, Enforce Repayments, Assess Reports. (RASER: Rule 263’s core actions).

Process Flowchart:

Start: Admin MinistriesWatch for AnnualStatements (GFR 20)Review for LoanDefaults (Principal/Interest)Statements NotReceived Timely?YesRemind AccountsOfficer PromptlyNoEnforce RepaymentsMeasuresMaintain Central Listof Loan SanctionsFA Submits AnnualAssessment Report (June 30)End: Report Submitted

Multiple Choice Questions

1. According to Rule 263 (1) of the General Financial Rules, 2017, what is the primary responsibility of Administrative Ministries regarding Annual Statements in Form GFR 20?

A) To prepare the Annual Statements in Form GFR 20.
B) To keep watch over the receipt of Annual Statements from the Accounts Officer.
C) To approve the format of GFR 20.
D) To submit GFR 20 directly to the Ministry of Finance.

Show Answer

Correct Answer: B) To keep watch over the receipt of Annual Statements from the Accounts Officer.

2. Under Rule 263 (1) of the General Financial Rules, 2017, what action should Administrative Ministries take if Annual Statements are not received in time?

A) Impose a penalty on the Accounts Officer.
B) Postpone the review of loan repayments.
C) Remind the Accounts Officer promptly.
D) Prepare the statements themselves.

Show Answer

Correct Answer: C) Remind the Accounts Officer promptly.

3. As per Rule 263 (1) of the General Financial Rules, 2017, what additional measure may Ministries arrange to maintain to facilitate a proper review of outstanding loans?

A) A separate budget for loan defaults.
B) A central list of all sanctions issued relating to advanced loans.
C) An external audit of all loan accounts.
D) A public database of all loanees.

Show Answer

Correct Answer: B) A central list of all sanctions issued relating to advanced loans.

4. Who is responsible for submitting the Annual Assessment Report on the status of outstanding loans, according to Rule 263 (2) of the General Financial Rules, 2017?

A) The Accounts Officer.
B) The Head of the Administrative Ministry.
C) The Financial Advisor of the Administrative Ministry concerned.
D) The Comptroller and Auditor General of India.

Show Answer

Correct Answer: C) The Financial Advisor of the Administrative Ministry concerned.

5. What is the deadline for submitting the Annual Assessment Report to the Ministry of Finance, as stipulated in Rule 263 (2) of the General Financial Rules, 2017?

A) 31st March of each financial year.
B) 30th April of each financial year.
C) 30th June of each financial year.
D) 31st December of each financial year.

Show Answer

Correct Answer: C) 30th June of each financial year.

Frequently Asked Questions

What is the main purpose of Rule 263 of the General Financial Rules, 2017?

The main purpose of Rule 263 is to ensure effective financial management and recovery of public funds by mandating administrative ministries to review loan repayment statuses and submit annual assessment reports to the Ministry of Finance.

Who is responsible for enforcing loan repayments under Rule 263 (1)?

The Administrative Ministries are responsible for keeping watch over annual statements, reviewing defaults, and taking suitable measures for enforcing the repayment of principal and interest due.

What information should the Annual Assessment Report include as per Rule 263 (2)?

The Annual Assessment Report should include the status of all outstanding loans, including timely and accurate payment of principal and interest due, and is to be submitted by the Financial Advisor to the Ministry of Finance.

Key Takeaways

Administrative Ministries must actively monitor annual loan statements (GFR 20) from Accounts Officers.
Prompt action, including reminders and enforcement measures, is required for any identified defaults in loan repayments.
A central list of all loan sanctions should be maintained by Ministries for comprehensive review.
Financial Advisors are mandated to submit an Annual Assessment Report on outstanding loans to the Ministry of Finance by June 30th each year.

Conclusion

Rule 263 of the General Financial Rules, 2017, is fundamental to maintaining fiscal accountability and ensuring the health of government finances. By establishing clear responsibilities for monitoring loan repayments and mandating regular assessment reports, it reinforces the government’s commitment to prudent financial management and the diligent recovery of public funds.

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