Conditions of Repayment
221. The following are the rules under which loans and advances are usually made :
(a) The terms of loans may in very special cases be extend to 30 years, but ordinarily the advances should be repaid within as short a period as possible.
(b) The term is to be calculated from the date on which the loan is completely raised or declared by the Government in the Finance Department to be closed.
(c) Dates may specially be fixed for the payment of the instalments.
(d) Instalments paid before the due date will be taken entirely to principal, unless, of course, any interest for a preceding period is overdue.
NOTES(1) When a loan is advanced by the Government in instalments the first half-yearly repayment should not be demanded until six month after the last instalment is taken ; meanwhile simple interest only should be realized. But should it appear that there is undue delay on the part of the debtor in taking out the last instalment of a loan, the Government in the Finance Department may at any time declare the loan closed, and order repayment of capital to begin.
(2) If in any case, particular dates in the calendar have been fixed, for the payment of interest, or for the repayment of instalments of debt, then such repayments should not begin until the second of the half-yearly dates so fixed, after the loan has been completely taken up simple interest only being recovered on the first half-yearly date after the completion of the loan. For example, supposing a loan the interest on which is recoverable half-yearly to be completely taken up on March 31, and the interest to be payable on June 30 and December 31, following the first half-yearly instalment in repayment of principal will not be due until December 31, simple interest only will be due on the intermediate June 30.
(3) Notes 1 and 2 are applicable, mutatis, mutandis, to loans the repayments of which are made by other than half-yearly instalments.
222. The Accountant General should bring to the notice of the Government any delay on the part of a debtor in taking out the last instalment of a loan that appears to him to require the remedy referred to in note (1) under paragraph 221 above and he will take this step whether there are any dates fixed for the taking of instalments or not.