APPENDIX II

(See Chapter II, paragraph 18)

Treasury Rules issued by the Governor of the Uttar Pradesh under clause (2) of Article 283 of the Constitution of India as adopted by Government Order No. AI—380/Y 10(1)/1950, dated January 26, 1950

SECTION I—Short title and commencement

1. These rules may be called the "Treasury Rules (Uttar Pradesh)."

1-A. If the Government considers it necessary or expedient so to do for avoiding any hardship or removing any difficulty that may arise as a result of the application of these rules it may, subject to such restrictions and conditions, if any, as it may think fit to impose, dispense with or relax the provisions of any of these rules in any case or class of cases.

SECTION II—Definitions

2. In these rules, unless the context otherwise requires, the following expressions have the meaning hereby assigned to them, that is to say :

(a) "State", "Government" and "Governor" mean, respectively the State, the Government and the Governor of Uttar Pradesh.

(b) "Consolidated Fund" means the Consolidated Fund of the State into which all revenues received by the Government, all loans raised by the Government by issue of Treasury bills, loans or ways and means advances and all moneys received by the Government in repayment of loans are credited under article 266 of the Constitution. No moneys out of this Fund can be appropriated except in accordance with law and for the purposes and in the manner provided in the Constitution.

(c) "Contingency Fund" means the Contingency Fund of the State established under the Uttar Pradesh Contingency Fund Act, 1950 (U.P. Act No. XIX of 1950) in terms of clause (2) of Article 267 of the Constitution.

(d) "Public Account" means the Public Account of the State into which all other public moneys received by or on behalf of the Government such as deposits, reserve funds, remittances, etc., which do not form part of the Consolidated Fund, are included in terms of articles 266 (2) and 284 of the Constitution. Disbursements from the Public Account are not subject to a vote by the legislature as they are not moneys issued out of the Consolidated Fund.

(e) "Treasury" means any Treasury of the State and includes a Sub-Treasury.

(f) "The Bank" means any office or branch of the Banking Department of the Reserve Bank of India, any branch of the State Bank of India, acting as the agent of the Reserve Bank of India in accordance with the provisions of the Reserve Bank of India Act, 1934 (Act No. 2 of 1934), and any branch of a Subsidiary Bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (Act No. 38 of 1959), which is authorised to transact Government business as agent of the State Bank of India, or any other agency appointed by the Reserve Bank of India.

(g) "Collector" or "District Officer" means the head of a district, and includes any other officer for the time being authorised to discharge the duties of the Collector for the purpose of these rules.

(h) "Accountant General" means the head of the office of Audit and Accounts subordinate to the Comptroller and Auditor General of India, who keeps the accounts of the State and exercises audit functions in relation to those accounts on behalf of the Comptroller and Auditor General of India.

(i) "Indian Audit Department" means the officers and establishment, being in India and subordinate to the Comptroller and Auditor General of India, that are employed upon the keeping and audit of the Accounts of the Union and of the States, or upon one or other of these duties.

(j) "Constitution" means the Constitution of India.

(k) "Government Servant" includes a person who, though not technically borne on a regular Government establishment, is duly authorized to receive or disburse money on behalf of Government.

(l) "Government Account" comprises the Consolidated Fund Account, the Contingency Fund Account and the Public Account of the State.

SECTION III—Location of Moneys Standing in the Government Account

3. Save as provided in sub-rule (2) of rule 7, moneys standing in the Government account must either be held in the Treasury or in the Bank. Moneys deposited in the Bank shall be considered as one general fund held in the books of the Bank on behalf of the State.

The deposit of such moneys in the Bank shall be governed by the terms of agreement made between the Governor and the Bank under section 21 of the Reserve Bank of India Act, 1934 (Act No. 11 of 1934).

SECTION IV—General System of Control over Treasury

District Treasuries

4. (1) Unless the Government, after consultation with the Accountant General otherwise directs in any special case there shall be a Treasury in every district. If moneys standing in the Government Account are, in any district, not deposited in the Bank, the Treasury of that district shall be divided into two departments ; a department of account under the charge of an Accountant and a cash department under the charge of a Treasurer.

Exception—The following districts have more than one independent Treasury :—

Lucknow—Two, both at the headquarters.

Saharanpur—Two, one at the headquarters and the other at Roorkee.

Garhwal—Three, one at the headquarters and one each at Lansdowne and Kalagarh.

(2) The Treasury shall be under the general charge of the Collector, who may entrust the immediate executive control to a Treasury Officer subordinate to him but may not divest himself of administrative control. The Collector shall be responsible for the proper observance of the procedure prescribed by or under these rules and for the punctual submission of all returns required from the Treasury by the Government, the Accountant General and the Reserve Bank of India.

Subject to the provisions of this rule, the respective responsibilities of the Collector and the Treasury Officer for business of the Treasury shall be such as may be defined in accordance with such rules as the Government in the Finance Department may approve, after consultation with the Accountant General.

(3) The duty of verifying and certifying the monthly cash balance, if any, in the Treasury in such manner as the Government in the Finance Department after consultation with the Accountant-General may prescribe and of submitting the monthly accounts of such balance in such form and after such verification as the Accountant General may require, shall be undertaken by the Collector or by such other officer as the Government may specify. It must be performed by the Collector in person at least once in every period of six months.

(4) When a new Collector is appointed to a district he shall atonce report his appointment to the Accountant General and shall certify to the Accountant General the amount of the cash balance, and stamps and opium store, if any, which he has taken over. The certificate shall be submitted in such form and after such verification as the Government in the Finance Department may, after consultation with the Accountant General, prescribe.

(5) No portion of the responsibility for the proper management and working of Treasuries shall devolve upon the officers of the Indian Audit Department. The inspection of Treasuries by officers of the Indian Audit Department shall not relieve the Collector of his responsibilities for management and inspection.

Sub-Treasuries

5. If the requirements of the public business make necessary the establishment of one or more Sub-Treasuries under a District Treasury, the arrangements for the administration thereof and for the proper conduct of business therein, shall be such as may be prescribed by the Government in the Finance Department after consultation with the Accountant General. The daily accounts of receipts and payments of moneys at a Sub-Treasury must be included in the accounts of the District Treasury.

6. (Deleted).

SECTION V—Payment of moneys into the Government Account

7. (1) Save as hereinafter provided in this section, all moneys, as defined in articles 266, 267 or 284 of the Constitution received by or tendered to Government servants in their official capacity shall, without undue delay, be paid in full into the Treasury or into the Bank. Moneys received as aforesaid shall not be appropriated to meet departmental expenditure, nor otherwise kept apart from Government Account. No Department of Government may require that any moneys received by it on Government Account be kept out of that Account. If any question arises whether or not moneys received by or deposited with Government servants were received by or deposited with them in their official capacity, then the question will be referred to the Government in the Finance Department, whose decision thereon shall be final.

(2) Notwithstanding anything contained in sub-rule (1) the direct appropriation of the receipts on Government Account for any expenditure payable out of those receipts and in particular the direct appropriation of departmental receipts for departmental expenditure is authorized in the following cases, that is to say :—

(a) in the case of moneys received in civil, revenue and criminal cases on account of the service and publication of summons and notices ; diet-money, travelling allowance, fees and pay of witnesses; fees and other charges of commissions and arbitrations ; expenses of civil prisioners ; and for other similar purposes ;

(b) in the case of deposits received at a civil court and utilized by the Court to meet claims for the refund of such deposits;

(c) in the case of cash receipts utilized in accordance with departmental regulations of the Public Works Department to defray expenditure on current works or utilized by that Department under the authorization of the Accountant General to defray pay and travelling allowance charges ;

(d) in the case of cash received by the Forest Department and utilized in meeting immediate local expenditure ;

(e) in the case of earnest money received from contractors with their tenders if it is refunded the same day ;

(f) in the case of fees received by Government servants appointed under Notaries Act, 1952 (Act No. 53 of 1952) and utilized to defray legal expenses incurred by them in the discharge of their duties as such Notaries ;

(g) in the case of cash found on the persons of prisoners at the time of their admission to jail, and used for the repayment by Jail Superintendents under departmental regulations of similar sums due to other prisoners on their release ;

(h) in the case of cash received by the officers of the Industries Department from the public on account of sale-proceeds at an exhibition, or on account of contributions for sending demonstration parties or exhibits to exhibitions ;

(i) in the case of receipts on account of sale-proceeds of stores or garden and farm produce utilized in accordance with the departmental regulations of the Agriculture Department, to meet expenditure on commission and other sale-charges ;

(j) in the case of receipts on account of sale-proceeds of Government property disposed of through auctioneers, to meet expenditure on commission paid to auctioneers ;

(k) in the case of court fees and fines realized by the Panchayati Adalats under the U.P. Panchayat Raj Act, 1947, for the payment of remuneration to persons employed in writing or preparing copies of the records, registers, summons, etc., or employed in serving warrants of arrests, summons, notices and in carrying out orders for seizing, selling and delivering property attached, or on account of expenditure on office contingencies, etc., or for disbursement of the balance to the Gaon Sabhas situated within the jurisdiction of the Panchayati Adalat ;

(l) in the case of fines (other than magisterial fines) and surplus sale-proceeds of impounded cattle, etc., under the Cattle Trespass Act, 1871, in respect of cattle pounds whether farmed out or managed directly by local bodies themselves ;

(m) in the case of registration fees mentioned in sub-paragraphs II and III of paragraph 183 of the Police Regulations for the payment of remunerations to clerks concerned ;

(n) (Deleted).

Provided that the authority hereby given for the direct appropriation of the receipts on Government Account including departmental receipts, shall not be construed as an authority for keeping the receipts and payments pertaining to such appropriation outside the account of the payments into, and the withdrawals from the Government Account.

8. [ Deleted ].

9. A Government servant may not, except with the special permission of the Government, deposit in bank moneys withdrawn from the Government Account under provisions of section VII of these rules.

10. The procedure to be adopted by Government servants and other collecting authorities in receiving moneys on behalf of Government, granting receipts for such moneys and paying them into the Government Account, and by the Treasury and the Bank in receiving such moneys and granting receipts for them, shall be such as may be prescribed by the Government in the Finance Department after consultation with the Accountant General. The procedure so prescribed shall, among other matters, contain provisions so as to secure that :–

(i) any person paying money into the Treasury shall present with it a memorandum (chalan) in such form, as may be prescribed, which will show clearly the nature of the payment and the person or Government servant on whose account it is made and will thus contain all the information necessary for the preparation of the receipt to be given in exchange and for the proper accounts classification of the credit and its allocation between Governments and departments concerned;

(ii) at places where the money is to be deposited in the Bank, the memorandum or chalan shall except where otherwise provided be presented direct to the Bank.

All departments of Government, receiving money from public, will, either supply the intending depositors with printed forms of chalans in triplicate free of charge with relevant head of account duly filled in, or will arrange to receive payments in cash, cheques, postal orders, money orders, etc. The chalans will not be required to be presented again to the departmental officer for signature as the details therein will already have been checked by the office issuing the chalans. In order to enable the Bank to verify that the chalan is in order and has been issued by the appropriate authority, the order to the Bank to receive payment, in the last column of the chalan form, should be signed by some departmental officer, whose specimen signatures should have been furnished to the Bank.

(iii) if a cheque on a bank is accepted in payment of Government dues under any rules, a receipt for the actual cheque only shall be given, but the formal receipt for payment shall not be delivered until the cheque has been accepted by the bank on which it is drawn; and

(iv) at places where the money is to be deposited in the Bank, the advices of receipts, which according to any provision made under this rule have to be sent to public officers or departments and consolidated receipts or certificates of receipts required by any such provision to be given to any public officer or department, shall be given by the Treasury and not by the Bank.

SECTION VI—Custody of moneys relating to, or standing in, the Government Account

11. (1) The procedure for the safe custody of the moneys in the hands of Government servants, or held in a Treasury, shall be as prescribed by the Government in the Finance Department after consultation with the Accountant General.

(2) The Bank is responsible for the safe custody of Government moneys deposited in the Bank.

SECTION VII—Withdrawal of moneys from the Government Account

12. In this section "withdrawal" with its cognate expressions refers to the withdrawal of funds from the Government Account for disbursement of, or on behalf of, the State other than disbursement in the United Kingdom.

13. Unless the Government in the Finance Department, after consultation with the Accountant General, otherwise directs in any case moneys may not be withdrawn from the Government Account without written permission of the Treasury Officer or of an officer of the Indian Audit Department authorized in this behalf by the Accountant General.

14. The Accountant General may permit withdrawal for any purpose authorized by the Government. Unless expressly authorised by these rules or by any special orders of the Government, the Accountant General may not permit withdrawal at a place outside the limits of his own jurisdiction.

15. (1) Subject as hereinafter provided in this section a Treasury Officer may permit withdrawal for all or any of the following purposes, namely :—

(i) To pay sums due from the Government to the drawing officer;

(ii) To provide the drawing officer with funds to meet claims likely to be presented against the Government in the immediate future by :—

(1) other Government servants, or

(2) private parties;

(iii) To enable the drawing officer to supply funds to another Government servant from which to meet similar claims;

(iv) To pay direct from the Treasury or from the Bank sums due by Government to a private party;

(v) In the case of an officer or authority empowered to make investment of moneys standing in the Government Account, for the purpose of such investment;

(vi) To pay sums to the drawing officer on account of permanent advance sanctioned to his office;

(vii) To pay sums on account of grants-in-aid, contributions, scholarships, stipends, etc.;

NOTE—The term grants-in-aid, contributions, etc., includes such classes of expenditure as grants to local bodies, religious, charitable or educational institutions, Contribution to public exhibition and fairs, expenditure from the discretionary grants and compensations to Government servants, both Gazetted and non-gazetted, for accidental losses, etc.

(viii) To pay sums on accounts of loans and advances;

(2) Unless expressly authorized by the Accountant General, a Treasury Officer shall not permit withdrawal for any purpose net specified in clause (1) of this rule.

16. Except as provided in rules 26 and 27 a Treasury Officer shall not permit withdrawal for any purpose unless the claim for withdrawal is presented by such person and in such form, and has been satisfactorily submitted by the Treasury Officer to such checks, as the Government in the Finance Department after consultation with the Accountant General, may prescribe. The procedure so prescribed shall, among other matters, contain provisions so as to secure :—

(i) that any person having a claim against Government shall present his voucher at the Treasury duly receipted and stamped where necessary and that unless otherwise specially provided no such claim shall be paid unless the claim is first submitted to, and the payment directed by the Treasury Officer;

(ii) that where Sub-Treasuries are specially permitted by the Government to cash certain classes of bills without reference to the Treasury Officer, the payment of such bill shall not, except under special arrangements and on particular occasions, be allowed at the District Treasury also, and

(iii) that all bills and vouchers, on which payment is made by the Treasury Officer or which are enfaced by him for payment at the Bank or a Sub-Treasury shall show to what head of account the payment is to be debited, how the amount of the payment is to be allocated between Governments or departments, and what amount, if any, appertains to the revenues of the Union Government.

17. A Treasury Officer has no general authority to make payments on demands presented at the Treasury, his authority being strictly limited to the making of payments authorized by or under these rules. If a demand of any kind is presented at a Treasury for a payment which is not authorized by or under these rules, or is not covered by a special order received from the Accountant General, the Treasury Officer shall decline payment for want of authority. A Treasury Officer has no authority to act under an order of Government sanctioning a payment, unless the order is an express order to him to make the payment; and even such special orders should, in the absence of urgency, be sent through the Accountant General.

18. A Treasury Officer shall not honour a claim which he considers to be disputable. He shall require the claimant to refer it to the Accountant General.

19. Except as provided by rules 20 and 21 a payment shall unless Government by general or special order otherwise directs be made in the district in which the claim arises.

20. The leave salary of a gazetted Government servant who draws his leave salary in India, may be paid in any district of the State. The leave salary of a non-gazetted servant may be paid in that district only in which his pay could be drawn if he were on duty.

Note :—For payments outside the State, [see rule 33 (3).]

21. Pensions payable in India may he paid in any district of the State.

Note :—For payments outside the State, [see rule 33 (3).]

22. No withdrawal shall be permitted in order to meet the pay, leave salary or allowances of a gazetted Government servant or any pension until the Accountant General has intimated to the Treasury Officer the rate at which payment shall be made; provided that the Government may, for special reasons and with the concurrence of the Accountant General, waive the provisions of this rule.

NOTE—In the following cases, the Government, with the concurrence of the Accountant General have waived the substantive provision of the rule and consequently no authority of the Accountant General for permitting the withdrawal of funds in such cases is necessary :—

(a) In the case of honorarium payable to gazetted Government servants, provided (i) the rates have already been laid down and (ii) the bills are countersigned by the departmental authorities competent to countersign the Travelling Allowance bills of the Government servant concerned. The departmental authority countersigning the bill should invariably certify that the honorarium has been sanctioned by the competent authority and that the concurrence of the Finance Department has been obtained, where necessary.

(b) In the case of payment of pay and allowances, etc., of gazetted Government servants in the pay scale the maximum of which does not exceed Rs. 12,00 per month drawn in the Establishment bill forms by Heads of Offices.

23. No withdrawal shall be permitted on a claim for the first of any series of payments in a district of pay or allowances to a Government servant other than a person newly appointed to Government service, unless the claim is supported by a last-pay certificate in such form as may be prescribed by the Comptroller and Auditor General of India. A Treasury Officer may not permit any withdrawal in respect of pay or allowances of a Government servant to whom he has granted a last-pay certificate unless the certificate is first surrendered.

24. The Treasury Officer shall be responsible to the Accountant General for acceptance of the validity of a claim against which he has permitted withdrawal, and for evidence that the payee has actually received the sum withdrawn.

25. The Treasury Officer shall obtain sufficient information as to the nature of every payment he is making and shall not accept a voucher which does not formally present that information unless there are valid reasons, which he shall record in writing for omitting to require it.

26. A Treasury Officer may correct an arithmetical inaccuracy or an obvious mistake in any bill presented to him for payment, but shall intimate to the drawing officer any correction which he makes.

27. A Collector may, in circumstances of urgency, by an order in writing authorize and require a Treasury Officer to make a payment, not being a payment of pension, without complying with the provisions of these rules. In any such case the Collector shall at once forward a copy of his order and a statement of the circumstances requiring it, and the Treasury Officer shall at once report the payment to the Accountant General.

NOTE—The special powers of the Collector under this rule may in an emergency he exercised by Additional District Magistrates, Sub-Divisional Officers residing at the headquarters of the sub-division away from the headquarters of the district, when communications with district headquarters are interrupted, and also by officers performing the duties of the Collector when the latter is absent from headquarters or incapacitated from discharging his duties. The special powers under this rule shall be deemed to cover the entire field of administration Central as well as State.

28. A Government servant who is authorized to draw moneys by means of cheques shall notify to the Bank or the Treasury upon which he draws the number of each cheque book brought into use and the number of cheques it contains.

29. When a Government servant who is authorized to draw or countersign cheques or bills payable at the Treasury or the Bank makes over charge of his office to another, he shall send a specimen of the relieving Government servant’s signature to the Treasury Officer or the Bank, as be the case may be.

SECTION VIII—Transfer of moneys standing in the Government Account

30. The transfer of Government moneys from one Treasury to another, and between the Currency Chest balance and Treasury balance of a Treasury and between a Treasury and the Bank shall be governed by such instructions as may be issued in this behalf by the Government in the Finance Department after consultation with the Reserve Bank of India. The transfer of moneys from or to a Small Coin Depot to or from a Treasury under the control of the State Government shall be governed by instruction issued by the President in this behalf.

SECTION IX—Responsibility for moneys withdrawn

31. If a Treasury Officer receives intimation from the Accountant General that moneys have been incorrectly withdrawn and that a certain sum should be recovered from a drawing officer, he shall effect the recovery without delay and without regard to any correspondence undertaken or contemplated with reference to the retrenchment order; and the drawing officer shall without delay repay the sum in such manner as the Accountant General may direct.

32. (1) Subject as hereinafter provided in this rule the procedure to be observed by a Government servant in regard to moneys withdrawn from the Government Account for expenditure shall be such as may be prescribed by the Government in the Finance Department after consultation with the Accountant General.

(2) A Government servant supplied with funds for expenditure shall be responsible for such funds until an account of them has been rendered to the satisfaction of the Accountant General. He shall also be responsible for seeing that payments are made to persons entitled to receive them.

(3) If any doubt arises as to the identity of the Government servant by whom an account of such funds shall be rendered, it shall be decided by the Government.

SECTION X—Inter Government Transactions

33. (1) Save as provided hereinafter in this section no transactions of the State with another Government shall be adjusted against the balance of the State except in accordance with such directions as may be given by the Comptroller and Auditor General of India with the approval of the President to regulate the procedure for the accounting of transactions between different Governments.

(2) Moneys presented within the jurisdiction of another Government for credit to the Government Account or a payment made by another Government as a withdrawal effecting the balance of the Government Account shall not be credited or debited to the Government Account except under express authority of the Accountant General or any other Accounting Officer authorized in this behalf by the Comptroller and Auditor General of India.

(3) When a gazetted Government servant or a pensioner desires to draw his leave salary or pension in India from a Treasury outside the State, payment may be authorized by the Accountant General in consultation with the Audit Officer of the State concerned.

(4) All adjustment against the balance of the State by debit or credit to another Government shall be made through the Central Accounts Office of the Reserve Bank of India.

34. Where such a course is authorised in consequence of a delegation of functions made under article 258(1) of the Constitution, the Treasury Officer may receive or authorise the Bank to receive moneys tendered on behalf of the Union Government, and may make or authorise the Bank to make disbursements on behalf of the Union Government in accordance with such procedure as may be specified in the rules made by or under the authority of the President. Such receipts and disbursements on behalf of the Union Government shall be adjusted, as far as practicable, directly against the balance of the Union Government held by the Bank, but where such transactions are temporarily taken into account against the balance of the State Government Account, the Accountant General will, on receipt of intimation from the Treasury, make the requisite adjustments in respect of the aforesaid transactions through the Central Accounts Office of the Reserve Bank of India, against the balances in the Government Accounts of the Union Government held by the Bank.

35. The Treasury Officer may, subject to any general or specific direction of the Government in this behalf, receive or authorise the Bank to receive moneys, tendered on behalf of another State and may, if so required by the Accountant General, make or authorise payment of any claim against another State. The necessary credits or debits in respect of such receipts and payments against the balances of the State concerned shall be made by the Accountant General through the Central Accounts Office of the Reserve Bank of India, but until such adjustments are made, the credits and debits shall be entered in the Government Account.

Moneys paid or received in the office of the Accountant General on behalf of another State and book entries made in the office of the Accountant General affecting the accounts of another State shall likewise be adjusted by the Accountant General through the Central Account office of the Reserve Bank of India against the balances of the State concerned.

36. The provisions of rule 35 may be extended with or without modifications to payments made or received in the State on behalf of the Railway, Post and Telegraphs and Defence Departments of the Union Government.

SECTION XI—Receipts and disbursements of the State in the United Kingdom

37. Until other provision is made by the Government in this behalf, transactions of the State in the United Kingdom shall be taken in the first instance against the balances in the Government Account of the Union Government in that country, in accordance with such procedure as may be prescribed by or under the authority of the President for the transaction of the Union Government in the United Kingdom. These transactions shall be adjusted in India, at the earliest apportunity, against the balances of the Government Account according to such directions as may be given in this behalf by the Comptroller and Auditor General of India with the approval of the President.

SECTION XII—Supplemental

38. The Accountant General in the exercise of any of his functions under these rules shall be subject to the general control of the Comptroller and Auditor General of India.

39. (1) Nothing in these rules, and nothing prescribed under these rules, shall have effect so as to impede or prejudice the exercise by the Comptroller and Auditor General of India of the powers vested in him by or under the Constitution, to make rules or to give directions regulating the submission to the Indian Audit Department of the accounts kept in Treasuries or in departmental offices and to be accompanied by such vouchers for their support as the Comptroller and Auditor General may require for purposes of audit or for purposes of keeping the account for which he is responsible.

(2) Where under the provisions of these rules the detailed procedure with respect to any matter is required to be prescribed or regulated by departmental regulations and where no rule or order has been made by the Governor as to the authority by whom the regulations shall be made, such regulations to be observed by particular department shall be made by the Government, or with the approval of the Government by such departmental authorities as may be authorized by the Government to act in this behalf.

(3) Nothing contained in this rule affects the validity of any order, instruction or direction contained in any authorized departmental Code, Regulation, Manual or any other compilation in force on the date of promulgation of these rules except in so far as such an order, instruction or direction is inconsistent with, or repugnant to any distinct provision contained in these rules.

40. The Government in the Finance Department may not exercise any power conferred upon them by these rules so as to impose upon the Bank in connexion with the business of the Government any responsibility not imposed upon the Bank by the terms of its agreement with the Governor.

ANNEXURE A

AN AGREEMENT made this seventh day of July, 1937, BETWEEN THE GOVERNOR OR THE UTTAR PRADESH of the one part and THE RESERVE BANK OF INDIA (hereinafter called "the Bank") of the other part.

WHEREAS the Bank was constituted and incorporated and is regulated by the Reserve Bank of India Act, 1934 [(being Act no. II of 1934 (hereinafter called "the Act")] as adopted and modified pursuant to the Authority contained in section 293 of the Government of India Act, 1935, by an Order of His Majesty in Council, dated the eighteenth day of March, 1937, cited as the India and Burma (Burma Monetary Arrangements) Order, 1937, with and subject to the various powers, provisions, and restrictions in and by the Act set forth and it a was thereby intralia particularly provided as follows, viz.—

(1) by section 20 of the Act that the Bank should undertake to accept moneys for account of State Governments and to make payments up to the amount standing to the credit of their accounts and to carry out their exchange, remittance and other banking operations including the management of the public debt; and

(2) by section 21 (1) of the Act that State Governments should entrust the Bank on such conditions as might be agreed upon with all their money, remittance exchange and banking transactions in India and, in particular, should deposit free of interest all their cash balances with the Bank provided that nothing in that sub-section should prevent State Governments from carrying on money transactions at places where the Bank has no branches or agencies and that State Governments might hold at such places such balances as they may require; and

(3) by section 21 (2) of the Act that State Governments should entrust the Bank, on such conditions as might be agreed upon, with the management of the public debt and with the issue of any new loans.

NOW IT IS HEREBY MUTUALLY AGREED AND DECLARED by and between the said parties hereto as follows, that is to say—

1. This agreement shall be deemed to have come into force on the first day of April, 1937.

2. The general banking business of the Government of Uttar Pradesh (hereinafter referred to as "the Government") including the payment, receipt, collection and remittance of money on behalf of the Government shall be carried on and transacted by the Bank in accordance with and subject to the provisions of this agreement and of the Act and with and to such orders and directions as may from time to time be given to the Bank by the Government through any Government officer or officers authorized by the Government in that behalf and at any of the offices, branches or agencies of the Bank for the time being in existence as may from time to time be so directed and for this purpose such accounts shall be kept in the books of the Bank and at such offices branches or agencies of the Bank as shall be necessary or convenient or as the Government shall from time to time direct in the manner aforesaid.

3. The Government shall employ the Bank as the sole banker in India of the Government who shall deposit or cause to be deposited with the Bank or allow the Bank to receive and hold as banker the whole of its cash balances at any places at which for the time being the Bank shall have an office, branch or agency and the Bank shall subject to such orders as may from time to time to be given by the Government in the manner aforesaid receive and hold for the Government all such moneys as may be or become payable to the Government or on its account and the Bank shall transact at its offices, branches and agencies for the time being existing respectively all such business for the Government regarding the receipt, collection, payment and remittance of money and other matters as is usually, transacted by bankers for their customers. The Bank shall make the said moneys at the said offices, branches and agencies available for transfer to such places and at such times as the Government may direct. No interest shall be payable to the Government on any of the moneys for the time being held by the Bank.

4. The management of the rupee public debt of the Government and the issue of new rupee loans by the Government and the performance of all the duties relating there to respectively including the collection and payment of interest and principal and the consolidation, division, conversion, cancellation and renewal of securities of the Government and the keeping of all registers, books and accounts and the conduct of all correspondence incidental thereto shall be transacted by the Bank at its offices in Bombay, Calculatta and Madras and at any of its offices, branches or agencies at which respectively the administration of any portion or portions of the public debt of the Government is for the time being conducted or interest thereon is for the time being payable and the Bank shall also keep and maintain such registers, books and accounts in respect of the said public debt as the Government may from time to time direct and shall audit all payments of such interest and act generally as agents in India for the Government in the management of the said public debt and shall conduct such agency subject to such orders and directions with regard to the general management thereof as may from time to time be given to the Bank by the Government.

5. The Bank shall not be entitled to any remuneration for the conduct of the ordinary banking business of the Government other than such advantage as may accrue to it from the holding of the Government cash balances free of obligation to pay interest thereon, and such balances shall be maintained at an amount not below such minimumas may be agreed upon between the Government and the Bank from time to time :

Provided that if the Government wishes to remit funds outside the area within its jurisdiction except as otherwise provided for in this agreement the Bank shall be entitled to make a charge for such remitances at rates not exceding those which the Bank charges to Banks referred to as "scheduled banks" in section 42 of the Act subject to a minimum charge of four annas for each remittance.

6. The Bank shall make ways and means advances to the Government if so required at such rate of interest not exceeding bank rate as may be fixed by the Bank from time to time; provided that the total of such advances outstanding at any one time shall not exceed the amount of the minimum balance prescribed under clause 5 and any subsidiary agreement provided under the clause and provided further that the advances outstanding shall be fully paid off at intervals not exceeding three months.

7. The Government shall employ the Bank as its sole agent for investments by Government either of Government funds or of funds managed by the Government and Bank shall be entitled to charge commission for sales (but not for purchases nor for conversion) at the rate of 1/16 per cent in addition to any further charges which the Bank may have to pay by way of brokerage, etc. The Bank shall collect interest and the maturity values of such investments on behalf of the Government without charge.

8. As remuneration to the Bank for the management of the public debt as aforesaid the Bank shall be entitled to charge to the Government half-yearly a commission at the rate of Rs. 2,000 per crore per annum on the amount of the public debt as aforesaid at the close of the half-year for which the charge is made. In calculating this charge following amounts shall be excluded from the amount of public debt, viz. :

(a) The amounts of loans discharged outstanding after one year from the date of a notice of discharge.

(b) The amount of stock certificates for Rs. 50,000 and upwards held by the Government or by any officer or officers of the Government authorized in that behalf provided that such amount exceeds one crore.

And in addition to the charge of Rs. 2,000 per crore per annum the Bank shall be entitled to charge to the Government a fixed sum of Rs. 2,000 a year on account of the stock certificates referred to in head (b) of this clause and the Bank shall be also entitled to charge the public (but not the Government) all such fees and charges as are now or may hereafter from time to time be prescribed by the Governor General under the powers conferred upon him by the Indian Securities Act, 1920 (Act no. X of 1920) for duplicate securities and for the renewal, consolidation, division, or otherwise of all Government securities which the Bank issues :

Provided that loans not directly issued by the Government but issued under the guarantee of the Government shall not be included in the calculation for the purpose of this clause but shall be a matter for separate arrangement if the management of such loans is entrusted to the Bank.

9. The Bank shall maintain currency chests of its issue department at such places within Uttar Pradesh, as the Government may with the previous sanction of the Central Government, prescribe and the Government shall provide sufficient accommodation for such chests as may be required for the deposit of notes or coin and shall be responsible to the Bank for the safe custody of the said chest, notes and coin. The Bank shall keep the said chests supplied with sufficient notes and coin to provide currency for the transactions of the Government and reasonable remittance facilities to the public at the said places. The Government shall supply the Bank with such information and returns as the Bank may from time to time require as to be composition of the balances in the said chests and the amount and nature of the transfers to and from the said chests. The Bank shall have access to the said chests at all reasonable times for the purpose of inspecting and checking the contents. The Government shall be responsible to the Bank for the examination and correctness of coin or notes at the time of deposition or with drawal from the said chests.

10. The Bank shall not be at liberty to close any of its office or branches except on Sundays, New Year’s Day, Christmas Day, Good Friday, and any other day declared to be a public holiday by any notification published in pursuance of the Negotiable Instruments Act (Act XXVI of 1881), subject nevertheless and notwithstanding the provisions of that Act to any special orders or directions which may be issued by the Government and the Bank shall be responsible that no one of its agencies doing Government business for the time being existing, shall be closed except on Sundays and on public holidays authorized by the Government within whose jurisdiction such agencies may be respectively situtaed.

11. The responsibility for all loss or damage to the Government which may result from any act or negligence or omission of the Bank or its agents in conducting the business of the public debt aforesaid of the payment of interest of discharge value thereon or the renewal, conversion, consolidation, sub-division, or cancellation of any Government security shall rest with and beb orne by the Bank provided however that it shall not be incumbent on the Bank to verify signature and endorsements on Government securities which prima facie appeal to be in order and in the acceptance of which the Bank shall not be guilty of any negligence and in such cases no liability shall be incurred by the Bank in respect thereto PROVIDED ALSO that in regard to the ordinary banking business at the offices branches and agencies of the Bank of receiving and realizing money and securities for money or account of the Government and paying cheques, orders, draft bills and other documents whether negotiable or not in the Bank’s capacity of bankers for the Government and whether such business be done by the Bank or by agencies in its behalf the responsibility to the Government shall be that of the Bank and such responsibility shall be that of banker to an ordinary customer.

12. The Bank shall remit on account of the Government between India and London such amounts as may be required by it from time to time at the market rate of the day for telegraphic transfers, subject to the proviso that if a large transfer has to be effected in connexion with the flotation or repayment of a sterling loan or analogous operation and if it is considered by either party to be inappropriate to apply the rate of a single day, an average rate based on a longer period may be fixed by agreement between the two parties.

13. This agreement may be determined by either party giving to the other party one year’s notice in writing expiring on the 31st day of March in any year, such notice if given by or on behalf of the Government to be addressed to the Governor of the Bank and to be served by leaving the same with the Head Office of the Bank or addressing the same to him at the Head Office of the Bank by registered post and if given by the Bank to be served by leaving the same with or addressing the same by registered post to the Secretary to the Government in the Finance Department and immediately upon the expiration of such notice this agreement shall absolutely cease and determine save as to rights or liabilities acquired or incurred prior to such termination.

14. In the event of any dispute arising as to the terms and conditions of this agreement, or as to the rights or obligations of the parties hereto such dispute or difference of opinion shall, in the event of the parties hereto failing to reach an agreement, be referred to the Governor General whose decision shall be final and binding as between the parties hereto.

15. Nothing in this agreement shall operate to affect in any way the obligations imposed either on the Government or on the Bank by or under the Act or any subsequent amendment or amendments of the Act.

16. The Bank shall be entitled to perform all or any of the matters contained in this agreement through such agency or agencies as may be prescribed by the Act or any amendment thereof as may be approved by the Government.