You are on page 1of 115

NATIONAL THERMAL POWER CORPORATION LIMITED

MANUAL ON LOAN ACCOUNTING

November 2002

A. F. FERGUSON & CO
NEW DELHI
1

CONTENTS

Process No Process Page No

Introduction
Accounting Policies
01 Loans from GOI- Funded by bilateral/ multilateral 4
agencies
02 Loans in local currency 11
03 Loans in foreign currency 16
04 Cash Credit 29
05 Acceptance of Public Deposits 32
06 Bonds Accounting 47

Appendices
Appendix I Formats for Loan Accounting

Appendix II Formats for Public Deposit Scheme

Appendix III Formats for Bonds Accounting


Introduction

This manual lays down the procedure in respect of loan accounting both in domestic and
foreign currency. The manual also provides the procedure for public deposits and accounting for
bonds issued.

All loans are centralized at Corporate Centre. At CC the loans are allocated to the various
stations/ projects. The manual provides the accounting policies and procedure for accounting for
the loans received, allocation to the stations/projects, receiving the expenditure statements from
the stations/projects and filing for reimbursements with the lending agency. The manual also
provides the procedure in respect of cash credit accounts – limits to be obtained from the banks,
allocation of the limits to the station, reporting of utilization, etc.

The manual provides the procedure for public deposits i.e. receipt of application,
processing the application, issuing of deposit receipts, brokerage payments, interest payments as
per the terms of the deposit, refunds on maturity, procedure for premature withdrawal of
deposits and control over the stationary for deposits.

Bond accounting procedure as contained in the manual outlines the procedure for issue
and allotment of bond, payment of underwriting commission, payment of interest and on
maturity, control over pre-signed stationary and destruction of stationary.

Manual on Loan Accounting 0


1.00 ACCOUNTING POLICIES

1.01 This section provides the accounting policies to be followed in respect of loan
accounting.

Borrowing cost

1.02 Borrowing cost includes the following items :

• Interest and commitment charges on borrowings.


• Amortisation of discounts or premiums relating to borrowings
• Amortisation of ancillary costs incurred in connection with the arrangement of
borrowings
• Finance charges in respect of assets acquired under finance leases or under other
similar arrangements
• Exchange differences arising from foreign currency borrowings to the extent that they
are regarded as an adjustment to interest costs
• Charges towards prepayment / foreclosure of loans
• Charges on account of delayed payments

1.03 Borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset (i.e. an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale) should be capitalised as part of the cost of that asset. The
borrowing costs should be capitalized till such time the asset is capitalized / ready for use. Other
borrowing costs should be recognised as an expense in the period in which they are incurred.

Changes in Foreign Exchange rates

1.04 The necessity for adjustment on account of exchange rate variation arises in:

• repayment of loan - the difference between the exchange rate at which the
repayment is effected and the rates at which the loan is appearing in the books
• interest payments – the difference between the rates at which the interest is accrued
in the books and the rates at which the interest is actually paid
• restatement of asset and liability at the year-end – the assets and liabilities at the
year-end should be restated in the books of account based on the closing exchange
rate.

1.05 The transactions in foreign currency should be recorded at the rates prevailing as on the
date of the transaction. At the year end, foreign currency denominated assets and liabilities
should be restated at the rates of exchange prevailing at the year-end.

Manual on Loan Accounting 1


1.06 The exchange rate variation on restatement of the asset/ liability should be adjusted in the
carrying cost of the fixed assets or charged to profit and loss account, as the case may be

1.07 The exchange rate variation (ERV) on account of repayment and restatement of loan
liability relating to qualifying assets should be capitalised. The ERV on interest component
relating to the qualifying assets should be capitalised only during the construction period and
thereafter should be charged to revenue.

1.08 The procedure to be followed and the basis of computing and allocating interest cost and
the ERV to capital assets has been provided in the manual on Fixed Assets Accounting.

Disclosure requirements

1.09 The financial statements should comply with the disclosure requirements as required
under the Companies Act, 1956 as well as the relevant Accounting Standards.

1.10 As per the Companies Act, 1956 the loans taken should be classified as secured /
unsecured with the following disclosures under each of the categories:

Secured loans

• Secured loans are to be classified as:

• Debentures
• Loans and advances from banks
• Loans and advances from subsidiaries
• Other loans and advances

Unsecured loans

• Unsecured loans are to be classified as:

• Fixed deposits
• Loans and advances from subsidiaries
• Short term loans and advances from
• Banks
• Others
• Other loans and advances from
• Banks
• Others

Manual on Loan Accounting 2


Other disclosures

The following disclosures should be made in the financial statements:

• Interest accrued and due on secured loans to be included under the appropriate sub-
heads given above
• The nature of security to be specified in each case of secured loans
• Terms of redemption or conversion (if any) of debentures issued to be stated with the
earliest date of redemption or conversion
• Loans from directors to be shown separately
• Where loans have been guaranteed by managers and/or directors a mention thereof
should be made and also the aggregate amount of such loans under each head

1.11 In addition to the above, the following are also required to be stated in the financial
statements of the company:

• accounting policy adopted for borrowing costs; and


• borrowing costs capitalised during the period.

Manual on Loan Accounting 3


Process: Loans from Government of India (GOI) Process No: 01
Funded by bilateral/ multilateral agencies

Process Brief:

Certain loans from bilateral/multilateral agencies are routed through GOI who in turn on lend
such loans to NTPC as budgetary support. The loan is given for specific projects and the
packages / parts of packages/ items that are to be funded out of the loan are also specified in the
loan sanction.

In case of such loans, the expenditure incurred by NTPC should be compiled and a claim for
reimbursement should be lodged on the concerned agency. The claim is approved by the agency
and the amount is remitted to the GOI. NTPC in turn should apply to the GOI to draw the
amount as loan periodically. The claims should be lodged periodically as specified by the
agency.

These loans are received and repaid in local currency by NTPC. The interest on the loans is also
paid in local currency. Hence, there is no ERV component on account of these loans.

The section concerned should ensure that:

• The claims are lodged in the specified formats and within the time frame prescribed
• No duplicate claims are filed
• The claims are filed on the basis of the actual expenditure incurred i.e. cash basis.
• Each reimbursement received from GOI is treated as a separate loan.
• That the claims filed are periodically reconciled with the books of account
• The loans are approved by the Board of directors
.

Departments/ Sections involved in the process:

• Budget Section, CC
• International Finance, CC
• Treasury Section, CC
• F&A Deptt, Project

Manual on Loan Accounting 4


Process: Loans from GOI – Receipt of loan

S. Activity Person Frequency Remarks


No Responsible

Sanction of loan

1 Receive a sanction/ approval from GOI IF Section – As and


for the loan component along with the CC when
details of the:

• Loan amount
• Lending agency
• Terms and conditions of the loan
• Projects and the specific packages
to be funded out of the loan
• Instructions for filing of claims
(time period and formats for filing
the claim)
• Other requirements to be fulfilled

Enter the details in the system to update


the loan master
2 Provide to the projects concerned the IF Section – Within 2
specifications of the packages/items to CC days of
be funded by the loan, the format and intimation
periodicity of submitting the from GOI
information to the IF Section for filing
the claim
3 Generate a BPV for payment of the IF Section – As and
front end fees i.e. commitment charges, CC when
guarantee fee, etc (applicable as per the
terms of the loan sanction)

Verify and authorise the BPV as per


IWA and forward to Treasury section
for releasing the payment
4 Release payment as per procedure Treasury Same day
detailed in Cash and Bank manual . section

Manual on Loan Accounting 5


S. Activity Person Frequency Remarks
No Responsible
Drawal of funds

5 In the case of project specific loans F&A – Project As and


enter the loan as the ‘source of when
financing’ on the vouchers as and when
bills are processed and payments are
released.
6 Compile a report of the expenditure F&A –Project Monthly
incurred in respect of the package/item
funded by the loan and forward it along
with all the necessary supporting
documents( such as Invoices, proof of By the 7th of
payment, copies of Railway receipt the
etc.) to I F section CC following
month
7 Receive the report from the projects IF Section - Monthly
Ensure that the reports have been CC
received from all the projects
concerned.

Verify the reports and ensure that


• Only the qualifying expenditure in
respect of the specified packages/
items has been included in the
report
• all the necessary documents are
enclosed
• The cumulative expenditure
claimed is within the sanctioned
limit as per the loan agreement
8 Consolidate the information received IF Section – Within 2
from all the projects concerned and CC days
compile the claim document

Comply with other requirements, if


any, and file the claim with GOI along
with all the necessary documents
9 Receive the funds (vide cheque/ pay Budget Section As and
order) from the GOI, as per the – CC when
sanction order.

Forward the cheque/ pay order to the


Manual on Loan Accounting 6
S. Activity Person Frequency Remarks
No Responsible
Treasury Section (along with the details
of the lending agency and the account
head to which the amount is to be
credited) to generate BRV and to
deposit the cheque/pay order in the
bank

Update the loan ledger with the details


of the loan received

10 Generate BRV and deposit the Treasury Same Day


cheque/pay order in the bank as per section
procedure detailed in the manual on
cash & Bank
MIR
12 Statement of utilisation of the funds

Generate a statement (project- IF Section, CC Monthly


wise/package-wise) of loan sanctioned
and the utilisation thereof in respect of
each loan.
13 Reconciliation of claims filed with
the books of account

Prepare a reconciliation statement in F&A – Project Quarterly


respect of expenditure reported for
raising the claim on the lender with the
expenditure recorded in the books of
account
13 Status of claims lodged and
reimbursements received

Prepare a report on the status of the IF Section, CC Quarterly


claims lodged and the reimbursements
received indicating the reasons for the
discrepancies/ delays, if any.

Manual on Loan Accounting 7


Process – Interest payments

Each drawal from GOI is to be treated as a loan with a unique loan number assigned to it. The
interest should be paid as per the terms of the agreement at the rate of interest indicated in the
sanction order. Interest payments would accrue from the date of the drawal.

Process : Interest payments

S. Activity Person Frequency Remarks


No Responsible
Interest payments
1 Update the interest rate in the system Budget Section As and
to calculate the interest payable as per – CC when
the terms of the loan. (interest
rates are
intimated by
GOI)
2 Generate a statement of interest Budget Section Monthly
payments falling due in the – CC
subsequent month providing the
interest computation for each loan.

Forward a copy of the statement to


the Treasury Section, CC for fund
planning
2 days prior
Generate a BPV for payment of to the due
interest. date for
payment of
Verify and authorize the BPV as per interest.
IWA and forward to Treasury section
for releasing the payment Same day
3 Release payment as per procedure Treasury Same day
detailed in manual on Cash & bank section
section
Interest accrual
4 Generate statement of interest Budget Section Period
accrued providing the computation – CC closing
for each loan

Generate a JV for the interest accrued


on all the loans

Manual on Loan Accounting 8


S. Activity Person Frequency Remarks
No Responsible
Verify and authorize the JV as per
IWA. Follow procedure as per
manual on Books for generation and Beginning
updation of JV of the next
month after
Reverse the entry for interest accrued period
closing

MIR

5 Interest payable during the


financial year

Generate a statement of the total Budget Beginning


interest payable during the financial Section, CC of the year
year on account of all loans along
with the due dates for payment

Forward a copy to Treasury section


for fund planning.
6 Delays in interest payment Quarterly

Prepare a report on delayed payment Budget


of interest, indicating the reasons for Section, CC
delays for review by competent
authority

Process : Repayment of Loan

All loan repayments should be made by the due date as stipulated in the loan agreements.

Process : Repayment of Loan

S. Activity Person Frequency Remarks


No Responsible
1 Generate a statement of the loan Budget Monthly
repayments falling due in the Section – CC
succeeding month

Forward a copy to the Treasury


Section for fund planning

Manual on Loan Accounting 9


S. Activity Person Frequency Remarks
No Responsible
Generate a BPV for repayment of
loan 2 days prior to
the due date for
Verify and authorize the BPV as per loan repayment
IWA and forward to Treasury section
for releasing the payment

2 Release payment as per procedure Treasury Same day The BPV


detailed in manual on Cash & bank section would
section update the
details of
the loan
repayments
in the loan
ledger/
master

MIR

4 Repayment schedule of loans


during the financial year

Generate a statement of the loans Budget Beginning of


scheduled for repayment during the Section, CC the year
financial year along with the due date
of repayment

Forward a copy to treasury Section


for funds planning.
5 Delays in loan repayments

Prepare a report on delays in Budget Quarterly


repayments of loan indicating the Section, CC
reasons for the delays for review by
of competent authority

Manual on Loan Accounting 10


Process: Prepayment of Loans

S.No Activity Person Frequency Remarks


Responsible
1 Seek internal approval of Budget As and when
Competent Authority for Section(For
prepayment of GOI Loan Domestic
Loans)
2 Seek approval of GOI for - do - - do -
prepayment of loan
3 Generate a statement of the - do - - do -
prepayment charge if any
applicable as per the loan
agreement payable to GOI
4 Generate a statement of the loan - do - - do -
amount proposed to be prepaid
5 Generate a statement of the interest - do - - do -
payable up to the date of payment
of loan
6 Generate a BPV for above. Verify - do - - do -
and authorise BPV as per IWA and
forward to Treasury Section for
releasing payment
7 Release payment as per procedure Treasury Same day
detailed in Manual Cash & Bank Section
Section

Document - Records

Document Document Format Ref Frequency Distribution


Title Type
Loan sanction from GOI I - As & when − IF Section, CC

Loan/ Interest Ledger R LA/01 - IF Section, CC


Report of expenditure O LA/02 As per the − F&A Projects
incurred time frame − IF Section, CC
specified
Consolidated Statement O LA/03 As per the − IF Section, CC
of expenditure incurred time frame − Budget Section, CC
(Claim Form –submitted specified − Lending Agency
to lending agency)

Manual on Loan Accounting 11


Document Document Format Ref Frequency Distribution
Title Type
Statement of Interest MIR LA/MIR/01 Annually/ − Budget Section, CC
payable Monthly − Treasury Section,
CC
Schedule of loan MIR LA/MIR/02 Annually/ − Budget Section, CC
repayments Monthly − Treasury Section,
CC
Statement of loan from O LA/04 As and − Budget Section, CC
GOI and the projects when − F&A – Project
financed thereunder
Statement of loan MIR LA/MIR/03 Monthly − Budget Section, CC
utilisation − F&A – Project
Status of Claims Lodged MIR LA/MIR/04 Monthly − Budget Section, CC
and disbursements
received
Report On delays in MIR LA/MIR/05 Quarterly − Budget Section, CC
Interest payment/ Loans
repayments
Reconciliation MIR LA/MIR/06 − F&A Project
Statement of claims filed − IF Section, CC
with the books of
account
BRV O As and − Treasury aection,
when CC
− Budget Section, CC
BPV O As and − Treasury aection,
when CC
− Budget Section, CC
JV O As and − Budget Section, CC
when

Accounting Entries

At CC

On receipt of loan

Bank A/c Dr
Loan A/c Cr

Manual on Loan Accounting 12


On accrual of interest

Interest A/c Dr
Interest accrued A/c Cr

On payment of interest

Interest Accrued a/c Dr


Bank A/c Cr

On reversal of interest accrued

Interest accrued A/c Dr


Interest A/c Cr

On repayment of loan

Loan A/c Dr
Bank A/c Cr

On transfer of interest to Project / Station

Inter unit/Cash Credit a/c Dr


Interest a/c Cr

At projects/Stations

Interest A/c Dr
Inter unit/Cash Credit A/c Cr

Manual on Loan Accounting 13


Process: Loans in local currency Process No: 02

Process Brief:

This process describes the procedure to be followed in respect of loans taken in local currency

The section concerned should ensure that:


• The loans are approved by the Board of Directors
• The loan tranche is drawn after assessment of requirement and taking approval of
competent authority.

• In case of project specific loans—

a) The claims are lodged in the specified formats and within the time frame prescribed
b) No duplicate claims are filed
c) The claims are filed on the basis of the actual expenditure incurred i.e. cash basis
d) That the claims filed are periodically reconciled with the books of account

• Certificates regarding compliance of loan covenants are issued in time as per the conditions of
Loan agreement

Departments/ sections involved in the process

• Budget Section, CC
• Treasury Section, CC
• F&A Deptt – Projects

Process : Receipt of Loan

S. Activity Person Frequency Remarks


No Responsible
1 Receive the loan agreement and enter the Budget Section As and when
details in the system to update the loan – CC
master
2 In case of project specific loans, provide to Budget Section Within 2 days
the projects concerned the specifications of – CC of intimation
the packages/items to be funded by the from the
loan, the format and periodicity of lender
submitting the information to the Budget
Section for filing the claim

3 Generate a BPV for payment of the front Budget Section As and when In case the
end fee i.e. commitment charges, guarantee – CC charges are
Manual on Loan Accounting 14
S. Activity Person Frequency Remarks
No Responsible
fee, etc as applicable as per the terms of the deducted by the
loan sanction. Verify and authorise the bank then
BPV and forward to Treasury section for account for the
releasing payment same based on
the bank advice
4 Release payment as per procedure detailed Treasury Same Day
in manual on Cash & Bank section Section
4 Forward the documentation (as required for Budget Section As and when
drawal of the loan as per the terms of the – CC
loan) duly approved by the competent
authority to the lending agency
5 Receive the funds (vide cheque/ pay order/ Budget Section As and when
direct credit in the bank account) from the – CC
lending agency.

Forward the cheque/ pay order to the


Treasury Section (along with the details of
the lending agency and the account head to
which the amount is to be credited) to
generate BRV and to deposit the
cheque/pay order in the bank

6 In case of direct credit by the bank, account Treasury As and when


for the same on the basis of the bank Section/
advice as per the procedure provided in the Budget Section
manual on Cash and Bank section.

Update the loan ledger with the details of


the loans received
7 Generate BRV and deposit the cheque/ pay Treasury Same day
order as per procedure detailed in the section
manual on Cash & Bank section
8 In case of project specific loans, enter the F&A – Project As and when
loan as the ‘source of financing’ on the
vouchers as and when bills are processed
and payments are released.

Manual on Loan Accounting 15


S. Activity Person Frequency Remarks
No Responsible
7 Compile a report of the expenditure F&A –Project Monthly
incurred in respect of the package/item
funded by the loan. (The expenditure
report to be generated by sorting the
payment vouchers by the source of
financing after the cut off date of the
earlier report)

Forward the report to the Budget Section, By the 7th of


CC along with all the necessary the following
supporting documents month

8 Receive the report from the projects Ensure Budget Monthly


that the reports have been received from all Section - CC
the projects concerned

Verify the reports and ensure that


• Only the qualifying expenditure in
respect of the specified packages/ items Within 2 days
has been included in the report
• all the necessary documents are
enclosed
• The cumulative expenditure claimed is
within the sanctioned limit as per the
loan agreement
9 Consolidate the information received Budget Section Within 2 days
from all the projects concerned, compile – CC
the claim document and file with the
lending agency (along with the
supporting documents). Also comply
with other requirements, if any, as per the
loan agreement

Interest accounting and Repayment of loans

The procedure, MIR reports and the accounting entries for interest payments, accrued interest and
repayment of loans shall be as provided in the case of loans received from GOI, funded by
bilateral/multilateral agencies (Process 1)

Manual on Loan Accounting 16


Process: Prepayment of Loans

S.No Activity Person Frequency Remarks


Responsible
1 Seek internal approval of Budget As and when
Competent Authority for Section(For
prepayment of lender Loan Domestic
Loans)
2 Seek approval of lender for - do - - do -
prepayment of loan
3 Generate a statement of the - do - - do -
prepayment charge if any
applicable as per the loan
agreement payable to lender
4 Generate a statement of the loan - do - - do -
amount proposed to be prepaid
5 Generate a statement of the interest - do - - do -
payable up to the date of payment
of loan
6 Generate a BPV for above. Verify - do - - do -
and authorise BPV as per IWA and
forward to Treasury Section for
releasing payment
7 Release payment as per procedure Treasury Same day
detailed in Manual Cash & Bank Section, CC
Section

Document - Records

Document Document Format Ref Frequency Distribution


Title Type
Loan agreement I As & when − Budget Section, CC
− Company Secretary, for
safe custody.

Loan/interest ledger R LA/01 -


Report of R LA/02 As per the − F&A Projects
expenditure incurred time frame − Budget Section, CC
specified
Schedule of Interest MIR LA/MIR/01 Annually/ − Budget Section, CC
payable Monthly − Treasury Section, CC

Manual on Loan Accounting 17


Document Document Format Ref Frequency Distribution
Title Type
Schedule of MIR LA/MIR/02 Annually/ − Budget Section, CC
repayment Monthly − Treasury Section, CC
Report on delays in MIR LA/MIR/05 − Budget Section, CC
loan repayments
Reconciliation MIR LA/MIR/06 − F&A Project
Statement of claims
filed with the books
of account
BPV O As and when − Cash and bank Section,
CC
− Budget Section, CC
JV O As and when − Budget Section, CC
Bank Advice I As and when − Cash and bank Section,
CC
− Concerned Section

Manual on Loan Accounting 18


Process : Loans/Bonds in foreign currency Process No : 03

Process Brief

This process lays down the procedure to be followed in respect of loans taken in foreign
currency. In case of loans in foreign currency, the necessary approvals from the Ministry of
Finance and RBI should be obtained. Moreover, it should be ensured that the guidelines as
provided by the RBI, Income-tax authorities, etc, as applicable in this respect have been
complied with.

Types of loans in foreign currency

Loans in foreign currency are broadly classified as under:

- Syndicated Loan
- Export Credit
- International Bonds

Drawal of loans

The drawal of the loans maybe in either of the following forms:

• Bullet disbursement – disbursement of the amount on the due dates as mentioned in the
loan agreement
• Staggered disbursement - disbursement of an amount over a period of time. The staggered
disbursement is made based on either of the following:
- Claims submitted (reimbursement of expenditure/ recoupment of imprest amount)
- Direct payments to suppliers

It should be ensured that:

• The loans are approved by the Board of Directors.


• The loan tranche is drawn after assessment of requirement and taking approval of
competent authority.
• The loan liability is restated at the time of closing of accounts.
• The exchange rate variation has been appropriately computed and accounted for on
repayment/restatement of the loan liability
• Claims for reimbursement are filed with the lending agency as per the terms of the loan
agreement
• Certificates regarding compliance of loan covenants are issued in time as per conditions of
Loan agreement

Manual on Loan Accounting 19


Departments/ sections involved in the process

• IF Section, CC
• Treasury Section, CC
• F&A Deptt – Projects

Process: Receipt of loan

S. Activity Person Frequency Remarks


No Responsible
Sanction of Loan

1 Receive the loan agreement and IF Section – As and


ensure that the terms are as agreed CC when
and finalised with the lending
agency

Enter the details in a loan master


2 Provide the Projects that are covered IF Section – Within 2
under the funding with the CC days of
specifications of the packages/items intimation
to be funded by the loan, the format from the
and periodicity of submitting the lender
claim documents to the IF Section

Provide the details of loan amount


sanctioned, likely dates of loan
drawal, terms of payment, etc to
Treasury Section for fund planning
4 Generate a BPV for payment of the IF Section – As and
front end fees i.e. management fee, CC when
insurance premium, if any, etc. (the
charges/ fees that are payable in
local currency) as per the terms of
the loan sanction

Generate an instruction to the banker


for payment of the commitment
charges, etc. (the charges that are
payable in foreign currency) as per
the terms of the loan sanction

Manual on Loan Accounting 20


S. Activity Person Frequency Remarks
No Responsible
Verify and authorise the BPV/
instruction to the banker as per the
IWA

Forward the BPV to the Treasury


Section for releasing the payment /
Forward the instruction to the
banker concerned to make the
payments

In case the charges are deducted by


the bank then account for the same
based on the bank advice as per
manual on Cash & Bank section.

3 Release payment as per procedure Cash and Same Day


detailed in manual on Cash & Bank Bank Section
section
4 Enter the loan as the ‘source of F&A – As and
financing’ on the vouchers as and Project when
when bills are processed and
payments are released.

Drawal of funds

5 Provide a notice of draw down/ IF Section – 2 days prior


claim to the lending agency to CC to the draw
arrange for the disbursement down date
6 Receive the funds in the (overseas) IF Section – As and
bank account from the lending CC when
agency or receive the funds directly
in the designated account of the
Bank located in India.

Finalise the terms for remittance of


funds with the (overseas) banker
(i.e. exchange rate, bank where the
remittance is to be made, etc)

Generate a BPV to account for the


transfer of funds from the (overseas)
bank account to the (domestic) bank
account
Manual on Loan Accounting 21
S. Activity Person Frequency Remarks
No Responsible

Receive a credit advice from the


Cash and Bank Section for the funds
received in the (domestic) bank
account. Ensure that the credit has
been received for the drawal amount
at the agreed rate of exchange

Generate a BRV/ journal voucher to


account for the credit advice –
generation, approval and updation of
BRV as per the Cash and bank
system

7 In case the drawal of loan is by way IF Section – As and


of release of payment directly by the CC when
lender to the contractor

Prepare a JV to account for the


disbursement, as per the manual on
Books section.

Expenditure incurred against loans drawn

8 Compile a report of the expenditure F&A – Within the This report would
incurred in respect of the Project/ IF time frame be required only
package/item funded by the loan. Section, CC specified in case of loans
received on a
Forward the report along with all the F&A –Project reimbursement
claim documents to the IF Section, basis
CC
9 Receive the reports along with the IF Section – As and
claim documents from the projects. CC when

Ensure that the reports have been


received from all the projects
concerned.

Verify the reports and ensure that: Within 2


• Only the qualifying expenditure days
in respect of the specified

Manual on Loan Accounting 22


S. Activity Person Frequency Remarks
No Responsible
packages/ items (as per the loan
agreement) has been included
• All the necessary documents are
enclosed
10 Consolidate the information IF Section – Within 2
received from all the projects CC days
concerned and the payments
released from the IF Section on
account of the projects

Prepare the claim on the lending


agency (as per the prescribed
formats) After approval of the
competent authority as per the IWA,
forward the claim to the lending
agency

MIR

11 Statement of utilisation of the IF Section monthly


funds

Generate a (project/ package wise)


statement of the utilisation of the
loan (both in rupees as well as in the
lender currency)

12 Reconciliation of claim documents F&A - Project Quarterly


submitted to the IF Section with
the books of account

Prepare a reconciliation statement


(loan-wise) of the expenditure
reported (against the specified
packages/ items financed under the
loan) with the expenditure recorded
in the books of account

Manual on Loan Accounting 23


S. Activity Person Frequency Remarks
No Responsible
13 Status of claims lodged and
reimbursements received

Prepare a report on the status of the IF Section, Monthly


claims lodged and the CC
reimbursements received indicating
the reasons for the delays/
discrepancies, if any.

Process : Interest Accounting

S. Activity Person Frequency Remarks


No Responsible

Interest payments

1 Generate a statement of interest IF Section – Monthly/


payments falling due in the CC Yearly
year/succeeding month providing
the interest computation for each
loan (the current date exchange rate
should be adopted to work out the
indicative amount due in Rupee
terms)

Finalise the exchange rate with the As and


banker for payment of interest. when (spot,
Intimate the Treasury Section about TOM,
the value date, amount and bank for Cash).
arranging the funds

Receive the debit advice for the As and


payment from the Treasury Section. when

Check that the advice is for the


interest amount due for payment at Same day
the exchange rate agreed with the
banker

Generate a JV to account for the


advice
Verify and authorize the JV as per
IWA
Manual on Loan Accounting 24
S. Activity Person Frequency Remarks
No Responsible

Follow procedure detailed in manual


on Books Section for generation and
updation of JV

The system to update the interest


ledger for the interest amount paid

Interest accrual

2 Generate statement of interest Budget Period


accrued providing the computation Section – CC closing
for each loan

Generate a JV to account for the


interest accrued on all the loans

Verify and authorize the JV as per


IWA. Follow procedure as per
manual on Books for verification
and authorisation of JV Beginning
of the next
Reverse the entry for interest month
accrued

MIR

3 Interest payable during the


financial year

Generate a statement of the total IF Section, Beginning


interest payable during the financial CC of the year
year on account of all loans along
with the due dates for payment,
based on the exchange rate
prevailing on the date of generation
of the report.

Forward a copy to Treasury section


for funds planning

Manual on Loan Accounting 25


Process : Repayment of Loan

S. Activity Person Frequency Remarks


No Responsible
1 Generate a statement of loan IF Section – Monthly
repayments falling due in the CC
subsequent month, providing the loan-
wise details (the exchange rate as on
the current date should be adopted to
work out the indicative amount due in
Rupee terms ) The system would
update the loan
Finalise the exchange rate with the As and ledger for the
banker for the repayment of the loan When amount repaid.
amount. Intimate the Treasury Section (spot,
about the value date, amount and bank TOM,
for arranging the funds Cash)

Receive the debit advice of the


amount of repayment from the
Treasury Section. As and
when
Check that the advice is for the
repayment amount and as per the
exchange rate agreed with the banker

Generate a JV to account for the


advice

Verify and authorize the JV as per


IWA Follow the procedure detailed in
manual on Books section for
generation and updation of JV

For accounting for bank advices


follow the procedure as outlined in the
manual on Cash and Bank Section

2 Report on delays in loan


repayments
Prepare a report on the delays in
repayment of loans indicating the IF Section, Quarterly
reasons for review of competent CC
authority

Manual on Loan Accounting 26


Process: Prepayment of Loans

S.No Activity Person Frequency Remarks


Responsible
1 Seek internal approval of IF Section As and when
Competent Authority for (For
prepayment International
Loans)
2 Seek approval of the lender for - do - - do -
prepayment of loan
3 Generate a statement of the - do - - do -
prepayment charge if any
applicable as per the loan
agreement payable to lender
4 Generate a statement of the loan - do - - do -
amount proposed to be prepaid
5 Generate a statement of the interest - do - - do -
payable up to the date of payment
of loan
6 Generate a BPV for above. Verify - do - - do -
and authorise BPV as per IWA and
forward to Treasury Section for
releasing payment
7 Release payment as per procedure Treasury Same day
detailed in Manual Cash & Bank Section, CC
Section

Restatement of loan liability

3 Generate a statement of the IF Section – At the


outstanding loan liability at the CC closing date
closing rate of exchange of Account

Generate a JV for restating the loan


liability outstanding at the rates of
exchange at the quarter end.
Account for the gain/ loss on
exchange rate as exchange rate
variation (ERV)

Verify and authorise the JV as per


IWA
Manual on Loan Accounting 27
Follow the procedure as detailed in At the
the manual on Book section for beginning of
generation and updation of JV. Accounting
period
Reverse the entry

MIR

4 Repayment schedule of loans


during the financial year

Generate a statement of the loans IF Section, Beginning


scheduled for repayment during the CC of the year
financial year along with the due
dates for payment, based on the
exchange rate prevailing on the date
of generation of the report.

Forward a copy to Cash & Bank


section for funds planning.

Document - Records

Document Document Format Ref Frequency Distribution


Title Type
Loan Agreement I - As & when - IF Section, CC
- F& A – (concerned)
Project
Loan/ Interest Ledger R LA/01 - -
Statement of R LA/02 As per the time - F&A Projects
expenditure incurred frame specified - IF Section, CC
Consolidated O LA/03 As per the time - IF Section, CC
Statement of frame specified - Lending agency
expenditure incurred
(Claim Form)
submitted to the
lending agency
Statement of Interest MIR LA/MIR/01 Annually/ - IF Section, CC
payable Monthly - Treasury Section, CC
Schedule of loan MIR LA/MIR/02 Annually/ - IF Section, CC
repayments Monthly - Treasury Section, CC

Manual on Loan Accounting 28


Document Document Format Ref Frequency Distribution
Title Type
Statement of loans O As and when - IF Section, CC
from international
funding agencies and
the projects financed
thereunder
Statement of loan MIR LA/MIR/03 Monthly - IF Section, CC
utilisation
Status of Claims R LA/MIR/04 Monthly - IF Section, CC
Lodged and
disbursements
received
Report on delays in MIR LA/MIR/05 Quarterly - IF Section, CC
loan repayments

Reconciliation MIR LA/MIR/06 - IF Section, CC


Statement of claims - F&A Project
filed with the books of
account
BRV O - As and when - Cash and bank
Section, CC

BPV O - As and when - Cash and bank


Section, CC

Journal Voucher O - As and when - IF Section, CC

Accounting Entries
On receipt of loan

Bank A/c Dr
Loan A/c Cr

On payment of interest

Interest a/c Dr
Bank A/c Cr

On accrual of interest

Interest A/c Dr
Interest accrued A/c Cr

Manual on Loan Accounting 29


On reversal of interest accrued

Interest accrued A/c Dr


Interest A/c Cr

On repayment of loan

Loan A/c Dr
ERV A/c Dr/ Cr
Bank A/c Cr

On restatement of loan at the year-end

ERV A/c Dr/Cr


Loan A/c Cr/Dr

On transfer of interest to Project / Station

Inter unit/Cash Credit a/c Dr


Interest a/c Cr

At projects/Stations

Interest A/c Dr
Inter unit/Cash Credit A/c Cr

Manual on Loan Accounting 30


Process : Cash Credit Process No : 04

This process lays down the procedure to be followed in respect of utilisation of cash credit limits
from the Banks. An arrangement for cash credit facility by way of sanction of cash credit limits
is entered into with the Banks. The cash credit facility would entitle the company to utilise funds
to the extent of the limits as sanctioned by the Banks for financing the working capital
requirement of the company.

The cash credit limits to be obtained from the bank should be based on the average working
capital requirement of the company as assessed at the beginning of each financial year based on
the Operation and Maintenance budget estimates as approved for the company.

The overall cash credit limit of the company may be allocated to the stations or it could be
retained as a central pool at Corporate Centre. In case the limits are to be allocated to the
stations, the quantum may be determined based on the working capital requirement of the
individual stations as projected in the budget estimates of the O & M budget of the respective
stations.

The cash credit limit availed should be periodically reviewed to ensure that the actual utilisation
of the limit is within the sanctioned limit. Based on the actual utilisation the limit should be
increased / decreased.

In case the cash credit limits are allocated to the stations, the day-end balances of all the cash
credit accounts of the stations should be transferred to the central pool account with the
respective banks at CC. At CC, the closing balance should be reviewed on a daily basis to ensure
utilisation within the sanctioned limit and for revision of the limits to the stations, if required.

An MIR should be generated by the Cash and Bank Section on a weekly basis providing an
analysis of the cash credit limit and the actual utilisation during the period. The MIR should be
submitted to the ED (F)/ Director (F) for review and necessary action i.e. for increasing/
decreasing the cash credit limit.

Accounting for cash credit

In case the cash credit limit is allocated to the stations and at the day end the closing balance is
transferred to the central pool at Corporate Centre then the transfer of the balance to CC is to be
accounted for by the stations and similarly an accounting entry would be passed at CC for the
balances received in the central pool.

The accounting entries should be passed through the Inter Unit Cash Credit Accounts.

Manual on Loan Accounting 31


Interest payable on the cash credit limit

The interest on the cash credit account should be accounted for at CC after due verification. At
the period end, the interest on the cash credit utilised should be allocated in proportion to the
cash credit limits allocated to the stations through Inter Unit Cash credit Fund account.

Interest debited by the bank is to be verified to ensure that the rate of interest and the period are
as per the actual utilisation by the company.

Bank Reconciliation Statement

A bank reconciliation statement should be prepared on a monthly basis – as per the procedure
provided in the manual on Cash and Bank.

Procedure: Accounting for cash credit balances transferred and interest on cash credit

S. Activity Person Frequency Remarks


No. responsible

Accounting for transfer of cash credit balances

1 Generate an IUA to account for the Cash and Bank Monthly


transfer of the cash credit balance to Section - Unit
the central pool at CC – as per the
procedure provided in the manual on
Books Section
2 Generate an IUA to account for the Cash and Bank Monthly
cash credit balances transferred from Section, CC
the stations to the central pool at CC –
as per the procedure provided in the
manual on Books Section

Accounting for interest on cash credit

3 Receive the bank statements in respect Cash and Bank Monthly


of the Cash credit account. Section, CC

Review the statement and enter the


day-end balance in the system to
update the Cash Credit utilisation
Register
4 Receive the debit advice from the Cash and Bank Monthly
bank in respect of the interest payable. Section, CC

Manual on Loan Accounting 32


S. Activity Person Frequency Remarks
No. responsible
Verify the interest from the Cash
Credit Utilisation Register.

Account for the bank advice as per the


procedure provided in the manual on
Cash and Bank.
5. Generate an inter unit debit advice to Cash and Bank Quarterly/
transfer the interest to the stations Section, CC Period- End.
(based on the limits sanctioned to the
units) – as per the procedure provided
in the manual on Book Section

Document - Records

Document Title Documen Format Ref Frequency Distribution


t Type
Bank Statement I - Daily - Cash and Bank
Section
Cash Credit Utilisation R LA/05 - -
Register
Inter unit Advice O - As and when - F&A Department,
Station
Statement of utilization of MIR LA/MIR/07 Monthly - Finance Head
Cash Credit Limits - ED (Finance)
- Director (Finance)

Manual on Loan Accounting 33


Process : Acceptance of Public Deposits Process No : 05

Process Brief

This process lays down the procedure to be followed in respect acceptance of public deposits.
Public deposits should be accepted in accordance with the provisions of the Companies Act,
1956 and the Rules prescribed thereunder, after due approvals from the Board of Directors have
been obtained.

Departments/ sections involved in the process

• Public Deposit (PD) Section, CC


• F&A Deptt – Regional Office/ inspection offices
• Collection Centres

Process : Acceptance of Public Deposit

The applications for the deposits are received either through Manager-cum-Brokers (brokers)
appointed by the Company or directly by the Company. The applications are received at the
‘Collection Centres’ as indicated in the application form. The collection centres represent the
specified Regional Offices, projects, inspection offices and Corporate Centre (Public Deposit
section). The applications received by the brokers should be deposited with any of the collection
centres.

At the collection centres a separate bank account should be maintained and the funds received on
account of deposits should be deposited in that account only. A standing instruction should be
issued to the banker to transfer the funds to the designated bank account in CC on a weekly
basis.

The PD certificates should be issued centrally by the Public Deposits Section at CC.

The Public Deposits Section should ensure the following:

• A record of the deposits accepted is maintained containing the details as prescribed under
the Companies Act, 1956 and Acceptance of Deposit Rules
• An Annual Return duly certified by the auditors of the company is submitted on or before
30th June of every year, for the year ended 31st March of that year

Process : Acceptance of Public Deposits

S. Activity Person Frequency Remarks


No Responsible
1 Receive the application for public Collection As and when
deposit (directly from the applicant/ centres

Manual on Loan Accounting 34


S. Activity Person Frequency Remarks
No Responsible
broker).

Check that:
• the application form has been
completed in full
• the documents as required have
been furnished (including the
relevant form for non-deduction
of tax, wherever applicable)
• amount of the deposit has been
received in the mode as specified
– cheque/ DD

Ckeck the validity of the instrument


and issue an acknowledgment to the
applicant/ broker.

In case of deposits received by the


brokers, sign the duplicate copy of
the challan as acknowledgement of
receipt of application form.
(Acknowledgement to the applicant
is issued by the broker)
2 Generate a pay-in-slip (PIS) for the Collection By the next
amount received and deposit the Centres day
same in the designated bank.

3 Review the bank statement to ensure Collection Daily


that the account has been credited Centre
with for all the cheques deposited.

In case of cheques dishonoured Weekly


return the same to the applicant/
broker as the case may be along with
the application form submitted
4 Generate a statement of the Collection Weekly
collections received and realised on Centre (other
account of public deposit. than
Corporate
Forward the statement to the PD PDS)
Section, CC along with the
application forms, other documents

Manual on Loan Accounting 35


S. Activity Person Frequency Remarks
No Responsible
received and a copy of the bank
statement for that period
5 Receive the statement of collections PD Section – As and when
received along with the documents CC
from the Collection Centres

Check that:
• the application form along with
all the documents have been
received
• the date of realisation of the
cheque/ DD recorded on the
statement is as per the bank
statement

Enter the details in the system to


update the PD system
6 Review the bank statement of the PD Section – Daily/Weekly The BRV/ BPV
bank account maintained at CC to CC may be
ensure that the funds as transferred generated by the
from the collection centre as concerned
reported in the statement have been Collection
received centre/ Treasury
Section on
Generate the following: account of funds
received/
On behalf of the collection centres transferred
- BRV for the funds received at
the collection centre
- BPV for transfer of funds from
collection centres to CC (PD
account)

On account of funds received in PD


account at CC
- BRV for funds received
- BPV for transfer of funds to CC
main account

On behalf of Treasury section


- BRV for funds received in the
main account

Manual on Loan Accounting 36


S. Activity Person Frequency Remarks
No Responsible

For generation of BPV and BRV


follow procedure as per manual on
Cash and Bank section
7 Generate a validation report of the PD Section – Weekly In respect of any
details entered and verify the details CC changes to be
(name, address, amount, period of effected say
deposit, scheme under which deposit address of the
received, broker name and code, etc) depositor, etc the
entered in the system with the same procedure
application forms. should be
followed for
Forward the verified validation changes and
report along with the application updation in the
forms to the competent authority for PD system
approval.

Review the validation report along I/C – Bonds


with the application forms and other Section
supporting documents. Ensure that
the details have been correctly
entered in the system. Approve the
validation report and authorize the
updation in the system.

Generate the PD certificate and


forward it to the applicant.

8 Generate a brokerage report PD Section – Monthly


providing the broker-wise CC
computations after considering the
recoveries, if any, from the broker
(say on account of premature
withdrawal, etc)

Generate a BPV for payment of


commission to the brokers (as per
the rates agreed with the broker).

Manual on Loan Accounting 37


S. Activity Person Frequency Remarks
No Responsible
Verify and authorize the BPV as per
IWA

For generation and updating of BPV


follow the procedure detailed in the
manual on Cash & Bank

Forward the authorized BPV to the


Cash and Bank Section to releasing
the payment.
9 Release payment as per procedure Cash & Bank Same day
detailed in Cash & Bank manual and section
hand over the cheques to Bonds
section
9 Receive the cheques from the PD Section – As and when
Treasury section and forward the CC
same to the brokers along with the
detailed computations

Process: Payment of interest

The interest payments should be made at the rates and as per the terms approved by the Board of
Directors. In case of cumulative PDs the interest is payable only on maturity. In case of non-
cumulative PDs the interest payable either monthly or quarterly as per the terms of the scheme.

The interest warrants should be sent to the depositors as per the guidelines issued in this respect
from time to time. As per the current policy, in case of non-cumulative deposits the interest
warrants for the deposits upto Rs. 16,000 are furnished for the entire period of the PD i.e. till
maturity along with the PD receipt. In other cases, the interest warrants for the current financial
year are sent along with the PD receipt. For subsequent years, the interest warrants are issued for
a year in advance.

In case of non-cumulative deposits, the TDS certificate is printed on the counterfoil of the
interest warrants and in case of cumulative deposits the TDS certificates are sent annually and on
maturity.

For payment of interest the PD Section should ensure the following:

• Interest warrants are issued as per the approved terms


• TDS at the applicable rates is deducted
• TDS is deposited with the authorities within the stipulated period as prescribed

Manual on Loan Accounting 38


• Funds equivalent to the interest warrants vouchers issued are available in the designated
bank account prior to the due dates for payment

Accounting for interest warrants issued in advance

The interest amount should be accounted for in the period in which it is due.

Process : Payment of Interest

S. Activity Person Frequency Remarks


No Responsible
1 Enter the interest rate and the PD Section, As and when
applicable Tax rates in the system to CC
calculate the interest payable and the
tax to be deducted as per the terms of
the PD.

2 Generate a statement of the total PD Section, On


interest payable and the TDS – CC processing
providing the detailed computations the PD/
period-end/
Generate a BPV and forward the same maturity
along with the computation statement
to the competent authority for
verification and authorization

Verify and authorize the BPV as per


IWA

Follow the procedure outlined in the


manual on Cash and bank for
generation and updation of BPV.
3 For subsequent years, generate the PD Section, After
interest warrants and issue the same to CC receiving due
the depositors along with the PD approvals
receipt
Cumulative PDs
4 Generate a statement of the interest PD Section, Monthly/Ann
accrued and the TDS component – CC ually and on
providing the depositor-wise detailed maturity

Manual on Loan Accounting 39


S. Activity Person Frequency Remarks
No Responsible
computation
5 Generate a JV for the interest accrued PD Section, Monthly/Ann
and the TDS payable. Forward to the CC ually and on
competent authority for approval maturity

Follow the procedure as detailed in the


manual on Book section for generation
and updation of JV
TDS
6 Generate a BPV for the TDS payable PD Section, By the 7th of
Verify and authorize the BPV as per CC the following
IWA month

Follow the procedure outlined in the


manual on Cash and bank for
generation and updation of BPV.

Forward to Treasury section for


preparation of cheque

Receive cheque from Treasury section


and deposit TDS with the authorities
concerned
7 Issue the TDS certificates to the PD Section, Within In case of
depositors – in case of cumulative CC specified non-
deposits time cumulative
schedule. deposits, the
TDS
certificates
are sent along
with the
interest
warrants

Process: Renewal of PD

PDs should be renewed based on the applications for renewals received from the depositors
along with the duly discharged (original) deposit receipt.

In respect of renewal of PDs ensure the following:

Manual on Loan Accounting 40


• The PDs are renewed based on an application from the depositor sent along with the original
PD certificate
• The PDs are renewed as per the terms and conditions of the PDs

The procedure followed in case of renewal of PD is the same as in the case of a fresh receipt of
PD except that in this case no funds are received. A new PD certificate is issued against the
amount due in respect of the old PD certificate and the PD ledger is updated accordingly
In case the PD is not renewed for the full amount or in case of cumulative PD schemes for odd
amounts, the balance/ odd amount should be refunded to the holder.

Process : Repayment of PD on maturity

The PDs should be repaid on maturity only after the duly discharged original PD certificates
have been received from the depositors. After carrying out the verification procedure the
payments should be released in the form of refund warrants.

In case of PDs that are unclaimed and unpaid within the period specified in this respect, the same
should be deposited with the GOI.

Process : Repayment of PD on maturity

S. Activity Person Frequency Remarks


No Responsible
1 Receive the duly discharged deposit PD Section, As and when
certificates from the depositor CC

Enter the details in the system

Generate a statement of the PDs


received for refund pending payment
2 Process the deposits matured/ due for PD Section, As and when
maturity during the week for CC
repayments
3 Generate the refund warrants for the PD Section, As and when
deposits processed and despatch the CC
same to the depositor after obtaining
the necessary approval of the
competent authority
4 Generate a BPV (for the refund PD Section, As and when
warrants issued) to transfer the funds CC refund
to the designated bank account and warrants are
forward the same to the competent mailed
authority for approval.

Manual on Loan Accounting 41


S. Activity Person Frequency Remarks
No Responsible
Verify and authorize the BPV

Generate a BRV to account for the


funds received in the designated bank
account

Follow the procedure as outlined in


the manual on Cash and bank for
generation and updation of BPV

Process: Premature withdrawal of PD

In respect of premature withdrawal of PD, the PD Section should ensure the following:

• Premature withdrawal of the PD is processed only on the basis of an application received


from the depositor along with the original PD receipt duly discharged and the un-encashed
(post dated) interest warrants, in case of non-cumulative PDs.
• Penal interest as per the terms of the scheme has been deducted before releasing the payment
• Proportionate brokerage has been recovered from the broker (in case of application received
through the broker).

Process : Premature withdrawal of PD

S. Activity Person Frequency Remarks


No Responsible
1 Receive an application along with PD Section, As and when
the original PD receipt and un CC
encashed interest warrants from the
depositor for premature withdrawal
of the deposit ( in case of non-
cumulative deposits.)

Enter the date of processing of the As & When


application in the system and the
period upto which the interest
warrants have been encashed in the
system, in case of non-cumulative
deposits.

Manual on Loan Accounting 42


S. Activity Person Frequency Remarks
No Responsible
Generate a note for approval of the Weekly
PDs that are to be considered for
pre-mature withdrawal (providing
the depositor-wise detailed
calculations).

Obtain the approval of the


competent authority

Generate a statement for funds


required on account of pre mature
withdrawal of PDs. Forward a copy
to the treasury Section.

Generate a BPV for the amount due


to the depositors and forward to the
competent authority for approval
along with the relevant supporting
documents.

Verify and authorize the BPV as per


IWA

For generation and updation of BPV


follow procedure as per manual on
Cash & Bank section

2 Generate the refund warrants in PD Section, As & When


favour of the depositors and mail it CC
to the depositors

Bank Reconciliation Statement

Separate bank accounts should be maintained for repayment of PDs and interest payments.

The bank should submit the reconciliation statement and the paid warrants on an annual basis.
The statement should be checked with the records maintained by the PD Section.

Manual on Loan Accounting 43


Filing of Annual Return

As per the requirements of the Companies Act, a return in the prescribed form duly certified by
the auditors of the company should be filed annually with the Registrar of Companies by the
30th of June for the year ended 31st March of that year. The relevant provisions of the
Companies Act in this respect should be complied with.

Control over pre-printed and pre-signed stationary

The bulk stationary for the PDs and the interest warrant should be kept in safe custody (in the
store). The stationary drawn for daily use should be kept in the safe custody in the office.
Records of the stationary (at all the locations) should be maintained.

It should be ensured that:

• The stationary is kept under safe custody.


• The stock of the stationary is periodically verified and reconciled with the records
maintained

Process : Control over pre-printed and pre-signed stationary

S. Activity Person Frequency Remarks


No Responsible
Receipt of stationary – godown
1 Prepare an LOA/ request to the PD Section, As and when The order to be
supplier/bank for the computerised/ CC placed should
pre-signed stationary and forward be based on the
the same to the respective trends of usage
printer/bank after obtaining due as observed in
approval the past
2 Receive the stationary from the PD Section, As and when
supplier/bank CC

Ensure that the stationary received is Immediately


as per the order placed and in serial on receipt
order

Enter the details of the stationary Same day


received in the system to update the
PDs Staionary Received register

Transfer the stationary received to


the store Same day

Manual on Loan Accounting 44


S. Activity Person Frequency Remarks
No Responsible
Issue of stationary from the godown
3 Receive a request for the issue of PD Section, As and when
stationary from the store along with CC
a reconciliation statement of the (Designated
opening balance of stationary in the Officer)
office premises, stationary utilised
during the period and the balance in
hand (as applicable) from the
concerned official in the PD section

Review the request and ensure that it Same day


is reasonable and authorise the issue
of the stationary from the store
4 Receive the stationary from the Concerned As and when
store. Officer - PD
Section, CC

Ensure that it is in serial order and Immediately/


enter the details in the system to Same day
update the stationary register
Issue of stationary from the office premises
5 Receive a request for issue of PD Section, As and when Unused
stationary to be used for the day CC stationary at the
end of the day
Issue the stationary and enter the Same day to be returned
details in the system to update the for the safe
stationary register custody
Physical verification
6 Generate a statement of the closing PD Section, Quarter –end
balance of the stationary in hand CC

Physically verify the stock of the Quarterly


stationary

Prepare a reconciliation statement of Within a


the discrepancies observed, if any fortnight of
completion of
Forward the report to the competent verification
authority for review

Review the report and take


necessary action

Manual on Loan Accounting 45


Document - Records

Document Document Format Frequency Distribution


Title Type Ref
Application for I As and when - Collection Centres
deposits - PD Section, CC
Public Deposit/ R PD/01 -
Interest Ledger
Statement of O PD/02 Weekly - Collection Centre
deposits received - PD Section, CC
and realised
PD Certificate O Weekly - PD Section, CC
- Depositor
Brokerage Report R PD/03 Monthly - PD Section, CC
(Summary)
Brokerage Report R PD/04 Monthly - PD Section, CC
(Broker-wise)
Statement of Interest MIR PD/MIR/ Annually/ - PD Section, CC
payable (Scheme- 01 Monthly/
wise summary) quarterly
Statement of Interest MIR PD/MIR/ Annually/ - PD Section, CC
payable (Depositor - 02 Monthly/
wise) quarterly
Statement of TDS O PD/05 Annually/ - PD Section, CC
payable (Depositor - Monthly/
wise) quarterly
Interest/ Refund O PD/06 Monthly/ - PD Section, CC
warrant Quarterly - Depositor
Statement of Refund MIR PD/MIR/ -
payable 03
Statement of PDs MIR PD/MIR/ Monthly - PD Section, CC
matured/ due for 4
maturity
Statement of MIR PD/MIR/ Weekly - PD Section, CC
premature 05
withdrawal of PDs
Statement of R PD/07 Weekly - PD Section, CC
brokerage recovery
due to premature
withdrawal of PDs
Stationary Register R PD/08 As and when - PD Section, CC
A&B

Manual on Loan Accounting 46


Document Document Format Frequency Distribution
Title Type Ref
Reconciliation R PD/09 -
statement of
stationary in hand
Statement of Closing O PD/10 Quarterly - PD Section, CC
balance of stationary
Physical Verification R PD/11 Quarterly - PD Section, CC
report
Pay-in-slip O As and when - Collection Centres
Bank Statement R - Collection Centre
- PD Section, CC
BRV O As and when - Cash and Bank
Section
BPV O As and when - Cash and Bank
Section
LOA I As and when - PD Section, CC
- Cash and Bank
Section

Accounting entries

On receipt of PD

Bank A/c Dr
Public Deposit A/c Cr

On payment of Interest

Interest on PD Dr
Bank A/c Cr

On repayment of PD

Public Deposit A/c Dr


Bank A/c Cr

On payment of Brokerage

Brokerage Expenses Dr
Bank A/c Cr

Manual on Loan Accounting 47


On transfer of interest to Project / Station

Inter unit/Cash Credit a/c Dr


Interest a/c Cr

At projects/Stations

Interest A/c Dr
Inter unit/Cash Credit A/c Cr

Manual on Loan Accounting 48


Process : Accounting for Bonds Process No : 06

Process Brief

This process describes the procedure to be followed in respect of issue of bonds.

Bonds Issue to the public

In case of public issue, the applications for the bonds are submitted to the company/ designated
banks. After the last date for receipt of application forms the various bankers are required to
(based on the Standing Instruction issued) transfer the money to the designated bank account at
CC (Controlling Branch).

Private placement of bonds

The bonds may also be privately placed. The procedure for issue of allotment letters, bond
certificates, interest payments, redemption of the bonds would be the same as in the case of
bonds issued to the public. (In this case as the number of investors is not large, press
advertisements for announcing the exchange of allotment letters with the bond certificates,
announcing the dates interest payments, etc. may not be required).

The bond issue must be in compliance with the Companies Act, 1956, the guidelines issued by
the Securities and Exchange Control Board of India (SEBI), guidelines issued for public sector
enterprises and the provisions of the Articles of Association of the Company.

For issue of bonds, ensure the following:

• Bonds have been issued only in pursuance of the approval from the Board of Directors
• The underwriting commission/ brokerage has been paid to the brokers at the rates as per the
LOAs entered with the brokers (considering the provisions of the Companies Act, 1956)
• The fees to the Lead Manager (s)/ Arranger(s)has been approved by the Board and are paid
as per the agreement entered into with them

Departments/ sections involved in the process

• Bond Section, CC
• Cash and Bank Section, CC
• Company Secretariat

Manual on Loan Accounting 49


Process : Issue of bonds

S. Activity Person Frequency Remarks


No Responsible
1 Receive the applications for Designated As and when In case of public issue it is
issue of bonds Banker/ the responsibility of the
Registrar/ Designated Banker/
Check that the : Bond Section/ Registrar and in case of
• application form has been Arranger private placement this
completed in full activity is carried out by
• documents as required for the Bond Section/ Arranger
submission have been
enclosed
• the amount deposited has
been realised
2 Receive a statement from the Bond Section On receipt of
bank (Controlling branch) the statement
regarding the total application from the
money received and account for banker
the same as application money
received
3 Enter the application details in Registrar/ After receipt
the system to create the allotment Bond Section of the
register. application
Allotment of bonds
4 Receive the allotment register Bond Section As and when Allotment should be made
from the Registrar providing the as per the guidelines
details of the allottees and obtain prescribed in this respect by
the approval of the BOD in SEBI
respect of the same

Intimate the designated bank


(Controlling Branch) to transfer
the amount in respect of the
unsuccessful applicants to the
refund warrant account and in
respect of the successful
applicants to NTPC’s bank
account
Manual on Loan Accounting 50
S. Activity Person Frequency Remarks
No Responsible

Generate and despatch the Bond Section/


following: Registrar

• Allotment letter along with


the cheque for interest for the
period commencing from the
date of realisation of the
investor’s cheque to the date
of allotment
• Refund cheque/ order to the
unsuccessful investors (for
non-allotment)

Account for the funds received Bond Section


and the money refunded–
generation of BRV/BPV as per
the Cash and Bank system

Payment of underwriting commission/brokerage


5 Generate a statement of the Bond Section/ As and when Underwriting commission is
underwriting commission Registrar to be paid only in respect of
payable to the brokers – the bonds allotted
containing the detailed
computations
6 Generate a BPV for the under Bond Section Monthly
writing commission and forward
to the competent authorities for
approval

- follow the procedure as


outlined in the manual on Cash
and Bank for generation and
approval of BPV
7 Receive the cheques from the Bond Section Same day
Cash and Bank Section and
despatch the same to the brokers
along with the detailed
computation statement
8 Exchange the allotment letters Bond Section/ As and when
with the bond certificates after Registrar
creation and registration of
security
Manual on Loan Accounting 51
S. Activity Person Frequency Remarks
No Responsible
9 Generate a JV for creation of the Bond Section Annually This entry would be
Debenture Redemption Reserve required till the maturity of
the series

Payment of interest

The interest payments should be made as per the terms of the bonds issue. In case of cumulative
bonds the interest amount is to be paid on maturity of the bonds along with the principal amount.

In respect of interest payments, the Bond Section should ensure the following:

• Interest warrants have been issued as per the terms of the issue
• TDS at the applicable rates has been deducted and deposited with the authorities within
the stipulated period as prescribed
• The bonds master has been updated for all transfer/ transmission/ requests for change of
name/ address, etc received till that period
• It has been ensured that the funds equivalent to the interest warrants issued have been
deposited in the designated bank account before the due dates for payment
• Interest is paid through interest accrued account only

Process : Payment of Interest

S. Activity Person Frequency Remarks


No Responsible
1 Enter the interest rate (as per the Bond After the bond This should be done
terms of the bond issue) in the Section/ issue before the due date
system to calculate the interest Registrar and for interest payment
payable Transfer
Agent
Enter the TDS rates as prescribed
in the system
2 Update the interest master for all Bond Before the
requests (approved) for transfer/ Section/ interest
transmissions, etc of bonds Registrar payment date
3 Generate a statement of the total Bond By the next This should be
interest payable and the TDS Section day carried out at least a
component– providing the detailed week in advance
computations

In respect of cumulative bonds,


generate a journal voucher for the
interest accrued but not due
Manual on Loan Accounting 52
S. Activity Person Frequency Remarks
No Responsible

Generate a request for transfer of 2 weeks prior


funds and forward it to the to the due
Treasury Section date of
interest
payment

Generate a BPV for the interest 4-5 days prior


payable to transfer the funds to the to the due
designated bank account and a JV date for
for the TDS to be deducted thereon interest
forward the BPV/JV to the payment
competent authority for approvals
along with the statement of the
interest payable

Follow the procedure as outlined


in the manual on Cash and Bank
section for generation and approval
of BPV

4 Generate the interest warrants and Bond Before the


despatch to the bond holders Section/ due date for
Registrar payment of
interest

TDS
5 Deposit the TDS with the Bond Within the
authorities Section time frame
stipulated

6 Issue TDS certificates to the Bond Section On payment


depositors of interest/
Annually

Manual on Loan Accounting 53


Transfer/ transmission, etc. of Bonds

In case a request for transfer/ transmission, etc. of bonds has been received, then after verifying
the request and ensuring that all the documents as required have been received, forward the
request to the competent authority to obtain approvals of the same. Forward the duly approved
transfer request to the Registrar/ agent (as applicable) to effect the necessary changes in the bond
master and ensure that the transfer has been correctly effected in the system.

Redemption of bonds

The bonds should be redeemed as per the terms and conditions of the bond issue. In case of
cumulative bonds, the total interest accrued is payable on redemption. In case of non-cumulative
bonds, the interest till the date of redemption since the last date of interest payment is to be paid
along with the principal amount. The refund warrants should be accordingly generated.

In respect of redemption of bonds, the following should be ensured by the Bonds Section

• Refund warrants have been issued only in respect of those bond certificates which have been
duly discharged
• A separate bank account has been opened for redemption of the bonds for each series
• The amount payable against the bonds processed for redemption has been transferred to the
designated bank account before the due date for redemption of the bonds

In case of bonds that are not redeemed within the period specified in this respect (currently 7
years) the same should be deposited with the GOI.

Process : Redemption of bonds

S. Activity Person Frequency Remarks


No Responsible
1 Generate JVs in respect of the Bond Section On maturity
following: of the Bond
Series
• to transfer the amount from the
Bond Account to Current liabilities
• to transfer the Debenture
Redemption Reserve to the
General Reserve
2 Receive the duly discharged bond Bond Section As and when
certificates from the holders
3 Review the certificates received and Bond Section/ As and when
after ensuring that the certificates have Registrar
matured carry out the necessary

Manual on Loan Accounting 54


S. Activity Person Frequency Remarks
No Responsible
verification procedure and update the
master to process the refund warrants
for redemption
4 Generate a statement of the bonds Bond Section/ As and when
processed for redemption Registrar

Generate the refund warrants for the


certificates approved for redemption

Despatch the refund warrants to the


bond holders
5 Generate a BPV (in favour of the Bond Section As and when on
designated bank account) for the receipt of the
amount on account of the duly duly discharged
discharged bond certificates for bond certificates
redemption and forward the BPV
along with the necessary supporting
documents to the competent authority
for approvals

Follow the procedure as outlined in the


manual on Cash and Bank Section
6 In respect of TDS- follow the Bond Section As and when
procedure as provided under the
process “ payment of Interest”

Bank Reconciliation Statement (BRS)

Separate bank accounts should be maintained for each bond series for receipt of the applications,
interest payments and redemption of the bonds. The BRS should be prepared at periodic intervals
in respect of all the bank accounts maintained (follow the procedure as provided in the manual
on Book section). The first reconciliation should be carried out within a period of 2-3 months of
expiry of the cheques receipt.

Control over pre-printed and pre-signed stationary (stationary)

The stationary for the allotment letters, bond certificates, interest warrants and refund warrants
should be maintained in a central store under security and periodically (as and when required)
the stationary should be withdrawn from the godown and maintained in the office premises or
handed over to agents (if any) involved for processing of the allotment letters, bond certificates,
interest/ refund warrants. Records for the stationary at all locations should be maintained.

Manual on Loan Accounting 55


In case of the bonds that have been redeemed, once the redemption is complete the unutilised
bond certificates for that series should be destroyed after obtaining the necessary approvals.

The bank account maintained for payment of interest/ redemption of the bonds should be
reviewed and after a reasonable period, the stationary for the interest warrant should be
destroyed.

The Bonds Section should ensure the following:

• The stationary has been kept under safe custody.


• The stock of the stationary (at all the locations) has been periodically verified and reconciled
with the records maintained
• An acknowledgement of the stationary handed over to any agent is obtained
• A periodic reconciliation of the stationary handed over to the agent has been carried out
• The stock of stationary is periodically reviewed and destroyed after a reasonable time (from
the date of maturity/ redemption)

Process : Control over pre-printed and pre-signed stationary (stationary)

S. Activity Person Frequency Remarks


No Responsible
Receipt of stationary –store
1 Prepare an LOA/request to the supplier Bond As and when
/bank for the computerised/ pre-signed Section
stationary for allotment letters and bond
certificates (based on the total applications
received and the IWs to be issued) and
forward to the respective supplier/ bank
after obtaining due approvals
2 Receive the stationary from the Bond As and when
supplier/bank Section

Ensure that the stationary received are as


per the order placed and in serial order

Enter the details of the stationary received


in the system to update the stationary
received register (maintained separately
for each series of bonds issued and
interest)

Transfer the stationary received to the


store

Manual on Loan Accounting 56


S. Activity Person Frequency Remarks
No Responsible
Issue of stationary from the store
3 Receive a request for issue of stationary Bond Section As and when
from the store along with a
reconciliation statement of the opening
balance of stationary in the office
premises, stationary utilised during the
period and the balance in hand (as
applicable)

Review the request and ensure that it is


reasonable and authorise the issue of the
stationary from the store
4 Receive the stationary from the store. Bond Section As and when

Ensure that it is in serial order and enter


the details in the system to update the
stationary register

If the stationary is issued to the agent


obtain an acknowledgment of the same
from the agent and maintain the
acknowledgement in a file
Issue of stationary from the office premises
5 Receive a request for issue of stationary Bond Section As and when Unused
along with the necessary supporting stationary at
documents the end of
the day to
Issue the stationary and enter the details be returned
in the system to update the stationary in the safe
register custody of
the Manager
Reconciliation of stock with agents
6 Obtain a reconciliation statement (for Bond Section At the end of
each category) of the stock of stationary each assignment
with the agent showing the opening
balance of the stock in hand, the stock
received/ issued during the period and
the closing balance of stock in hand
duly approved by the competent
authority
7 Check the reconciliation statement and Bond Section As and when
tally with the records maintained and

Manual on Loan Accounting 57


S. Activity Person Frequency Remarks
No Responsible
forward the same to the competent
authority for review and approvals

File a copy of the reconciliation


statement duly approved
Physical verification
8 Generate a statement of the closing Bond Section Quarterly
balance of the stationary in hand

Physically verify the stock of the


stationary and prepare a reconciliation
statement of the discrepancies observed,
if any.

Forward the report to the competent


authority for review

Review the report and take the


necessary action
Destruction of stationary
9 Generate a statement of the balance of Bond Section quarterly
the stationary (both at the godown and
office premises) that is to be destroyed

Obtain the necessary approvals for An officer


destruction of the stationary should be
present at
Generate a report of the stationary the time of
destroyed and after obtaining signatures destruction.
of the officials present for the Moreover,
verification, file the same an
intimation
Enter the details of the stationary of the action
destroyed in the system to update the taken should
stationary register. also be
informed to
Corporate
Vigilance
Deptt

Manual on Loan Accounting 58


Document - Records

Document Document Format Ref Frequency Distribution


Title Type
Application for issue I As and when - Bond Section, CC
of bonds
Bond/ Interest Ledger R BD/01 -
Statement of Interest MIR BD/MIR/01 Semi- - Bond Section
payable (series-wise) annually/
Annually/ On
maturity
Statement of Interest MIR BD/MIR/02 Semi- - Bond Section
payable (bond holder annually/
wise) Annually/ On
maturity
Interest/ Refund R BD/02 Semi- - Bond Section
warrants annually/ - Bond Holder
Statement of amount MIR BD/MIR/03 As and when - Bond Section, CC
payable on
redemption of bonds
Allottment letter/ O As and when - Bond Section
Bond Certificate - Depositor
Statement of R BD/03 As and when - Bond Section
underwriting
commission payable
Summary statement R - As and when - Bond Section
of Underwriting
Commission payable
Underwriting MIR BD/MIR/04 As and when - Bond Section
commission report
(broker-wise)
Stationary Register R BD04 As and when - Bond Section
Statement of Closing O BD/05 quarterly - Bond Section
balance of stationary
Physical Verification R BD/06 Annually - Bond Section
report
Statement of R BD/07 Quarterly - Bond Section
stationary to be
destroyed

Report on stationary R BD/08 Quarterly - Bond Section


Destroyed
BPV O As and when - Bond Section
Manual on Loan Accounting 59
Document Document Format Ref Frequency Distribution
Title Type
- Cash and Bank
Section
Bank Statement I - Bond Section, CC
BRV O As and when - Cash and Bank
Section
LOA I As and when - Bond Section

Accounting entries

1. On receipt of application money

Bank A/c Dr
Application Money A/c Cr

2. On refund of application money to unsuccessful applicants

Application Money Dr
Bank A/c Cr

3. On allotment of bonds

Application Money Dr
Bonds A/c Cr

4. On payment of brokerage/ underwriting commission

Brokerage/ underwriting commission Dr


Bank A/c Cr

5. On accrual of interest

Interest on bond A/c Dr


Interest accrued but not due on Bonds A/c Cr

Manual on Loan Accounting 60


6. On payment of interest

Interest accrued but not due on Bonds A/c Dr


Bank A/c Cr

Interest on bond A/c Dr


Bank A/c Cr

7. On redemption of bonds

Bonds A/c Dr
Current liabilities A/c Cr

Current Liabilities A/c Dr


Bank A/c Cr

8. On transfer of interest to Project / Station

Inter unit/Cash Credit a/c Dr


Interest a/c Cr

9. At projects/Stations

Interest A/c Dr
Inter unit/Cash Credit A/c Cr

Manual on Loan Accounting 61


Loan Accounting - Formats

Document Format Ref


Title
Loan/ Interest Ledger LA/01
Report of expenditure incurred LA/02
Consolidated statement of expenditure incurred – (claim LA/03
form submitted to lending agency)
Loans from GOI and statement of projects financed there LA/04
under
Details of financing under loans (from GOI/ International Funding LA/04A
Agencies)
Statement of Interest payable LA/MIR/01
Schedule of loan Repayments LA/MIR/02
Statement of loan utilisation LA/MIR/03
Status of Claims lodged and disbursements received LA/MIR/04
Report on delays in interest payment/loan repayments LA/MIR/05
Reconciliation of claims filed with the books of account LA/MIR/06
Statement of utilization of Cash Credit Limits LA/MIR/07

Manual on Loan Accounting 62


LA/01
LOAN/ INTEREST LEDGER
FOR THE PERIOD ------------
Account Head :
Voucher PO/WO Employee/ Bank Name of Party Particulars Amount (Rs) Remarks
No Date No Party Code Dr Cr.
Code
Opening Balance

Balance Total
Note:

Any other details as considered necessary, say, project reference, etc should be recorded in the remarks column

Manual on Loan Accounting 1


LA/02
STATEMENT OF EXPENDITURE INCURRED
FOR THE PERIOD ---------------
Project -------------------
Lending agency --------------
Loan No -----------------------
Package/ Item Voucher Type of Contract LOA No Invoice No & Amount
No & Payment or/ Date (Rs)
Date Supplier

TOTAL
Expenditure reported till the previous report (for the period ------) :
Expenditure as per this report :
Cummulative Expenditure Reported :

Cut off details:


Vouchers included from – (specify for each category of voucher – BPV/JV/IUA)
Last No Date

Prepared by --------------------- Approved by -------------------------

Prepared by : F&A – Project


Distribution : IF/ Budget Section, CC

Manual on Loan Accounting 2


LA/03
CONSOLIDATED STATEMENT OF EXPENDITURE INCURRED (CLAIM FORM)
FOR THE PERIOD ---------------
Lending Agency --------------------------
Loan No -----------------------
Sanction Amount -----------------
Loan Disbursed till date (FCY) -----------------
Project Package / Supplier/ LOA No Invoice No Amount (Rs)
Item contractor

TOTAL
Claim Details Cummulative Claim Details (Lender Currency)
Amount (Rs) Claimed till previous report
Exchange rate Claim in this report
Amount (Lender currency) Cummulative amount claimed

Approved by -------------------------
Prepared by : IF Section, CC
Distribution : Lending agency
Treasury Section, CC
GOI
Budget Section,CC

Manual on Loan Accounting 3


LA/04
STATEMENT OF LOANS FROM GOI/ INTERNATIONAL
FUNDING AGENCIES AND THE PROJECTS FUNDED THEREUNDER

LOANS Loan 1 Loan 2 Loan 3 Loan 4


Lending/funding agency
Loan Number
Date of Sanction
Period of Validity
Date of Expiry
Amount of Loan Sanctioned
- Lenders currency
- Local currency
Projects financed under the
loan (the total value in
respect of each project to be
specified)
Prepared by : Budget Section/ IF Section
Distribution : Concerned Projects
Treasury Section, CC

Note:
The details of the financing under the different categories as per the loan agreement to be prepared as per
LA/06A

Manual on Loan Accounting 4


LA/04A
DETAILS OF FINANCING UNDER LOANS (FROM GOI/ INTERNATIONAL FUNDING
AGENCIES)
Project……….
DETAILS OF LOANS
Loan Number
Date of Sanction
Period of Validity
Date of Expiry
Amount of Loan Allocated
- Lenders currency
- Local currency

Category/ Component of Loan


- Equipment
- Civil works
- Consultancy
- Spares
- Others

Total

Prepared by -------------------------------------- Approved by ----------------------

Prepared by : Budget Section/ IF Section


Distribution : Concerned Projects

Note :
The details of the packages/ items under each of the category should be specified ,as applicable

Manual on Loan Accounting 5


LA/05
Cash Credit Utilisation Register
For the period -----------------
Bank :
Branch:
Cash Credit Limit (Sanctioned/ Allocated) :

Date Amount (Rs)

Date Utilization Level % Utilization Remarks


Maximum Closing

Note:

In case of stations the limits as allocated by CC should be recorded in the register. At CC the overall limits
sanctioned by the bank should be recorded in the register.
In case of limits increased / decreased the same should be recorded in the register along with the dates from
which the revised limits are effective
A separate register is to be maintained in respect of each cash credit account

Manual on Loan Accounting 6


LA/MIR/01
STATEMENT OF INTEREST PAYABLE
FOR THE PERIOD ---------------------
Date of Lending Loan No Loan Interest No of days for Interest payable
Interest Agency Balance rate (%) interest
payment Outstanding payment
(Lender FCY Ex.rate Amount
Currency) (Rs)

TOTAL
Prepared by ------------------- Approved by ---------------------

Prepared By : Budget / IF Section, CC


Distribution : Treasury Section, CC

Note
• Date of interest payment would be as per the loan agreement
• Loan balance outstanding would be after considering the repayments to be effected during the period
• The no of days for interest payment to be calculated from the date of the loan/ last payment of interest till the due
date for interest payment
• The exchange rate prevailing on the date of preparation of the statement would be adopted
• In case of loans in local currency, the columns in respect of FCY and exchange rate would not be applicable
• The statement to be prepared at the beginning of the year and forwarded to the Treasury Section – for
arrangement of funds on the due dates

Manual on Loan Accounting 7


LA/ MIR/02
SCHEDULE OF LOAN REPAYMENTS
FOR THE PERIOD ------------------------------------------------------

Lending Agency Loan No Loan Balance Due date for Amount payable
Outstanding repayments
(Lender Currency)
FCY Ex.rate Amount (Rs)

TOTAL

Prepared by ------------------------------------- Approved by --------------------------------

Prepared By : Budget / IF Section, CC


Distribution : Treasury Section, CC

Note
• Date of re- payment would be as per the loan agreement
• The exchange rate prevailing on the date of preparation of the statement would be adopted
• In case of loans in local currency the columns for FCY and exchange rate would not be applicable
• The statement to be prepared at the beginning of the year and forwarded to the Treasury Section – for arrangement
of funds on the due dates

Manual on Loan Accounting 8


LA/ MIR /03

STATEMENT OF LOAN UTILISATION


As on --------------
PROJECTS ↓ Loan Total Amount sanctioned Utilisation Cummulative Remarks (reasons for under
No Sanctioned for disbursement till during the utilisation utilisation as compared to
date disbursements sanctioned to be
Amount (lender period specified)
currency)
FCY INR FCY INR

Prepared by ---------------------- Approved by ----------------

Prepared by :IF Section


Distribution : Concerned Projects

Manual on Loan Accounting 9


LA/ MIR/04
STATUS OF CLAIMS LODGED AND DISBURSEMENTS RECEIVED
As on ----------------------

Lending agency Loan No Total Sanctioned Claims Lodged Disbursements Recd Remarks
Amount

Prepared by ----------------------------- Approved by -------------------------------

Prepared By : Budget/ IF Section


Distribution : Treasury Section

Note:
• The reasons for disbursements not received / disbursements received less than the claims should be provided in the
column for Remarks

Manual on Loan Accounting 1


LA/ MIR/05
REPORT ON DELAYS IN INTEREST PAYMENTS/ LOAN REPAYMENTS
For the period -----------------------

LENDING AGENCY LOAN NO PARTICULARS AS PER THE LOAN ACTUAL RECEIPT/ REMARKS
AGREEMENT PAYMENT
Due Date Amount Date Amount (Rs)
(Rs)
Lending Agency – A Loan 1 REPAYMENT OF
LOAN

INTEREST PAYMENT

Loan 2 REPAYMENT OF
LOAN

INTEREST PAYMENT

Lending Agency - B Loan 1 REPAYMENT OF


LOAN

INTEREST PAYMENT

Prepared by -------------------------------- Approved by -----


------------

Prepared by : IF/Budget Section


Note:
• The reasons for the delays in payments beyond the due date should be recorded in the ‘Remarks’ column
• The statement should be prepared on quarterly basis and should be forwarded for review to the competent authority
• In case of loans in foreign currency the details should include the amount in lender currency and the exchange rate details also

Manual on Loan Accounting 2


LA/ MIR /06
RECONCILIATION STATEMENT OF CLAIMS FILED WITH THE BOOKS OF ACCOUNT

Lending Agency ---------------------


Loan No -------------------------------
Package/ Item ------------------------
Account Code -------------------------

Particulars Amount (Rs)

Total expenditure as per the books of account (details provided in LA/10A)

Add/Less:
• Items not included in the claim report

(provide the details and the reasons for non-inclusion say delay in receiving
IUA, voucher entered in the system after the due date for submission of the
claim form, etc)

Amount as per the claims filed with the lending agency (details provided in
LA/MIR/06A)

Prepared by -------------------------------

Approved by -------------------------------

Prepared by : F&A Project


Distribution : Budget/ IF Section

Notes:
• The statement to prepared quarterly for each loan allocated to the project and for each package/item
financed by the loan

LA/MIR/06A
Reconciliation Statement of claims filed with the books of account
Amount as per the books of Account (Account code --------)
For the month of Amount (Rs)

Total
Expenditure included in the claim report
Claim report for the period

Total
Manual on Loan Accounting 0
MIR/FM/07
STATEMENT OF OVERALL CASH CREDIT LIMITS
For the period -----------------

Bank Branch Cash Credit Limit Utilisation level % Utilisation Remarks


Maximum Closing

Total

Prepared By ---------------

Approved By ----------------

Manual on Loan Accounting 1


FORMATS – BONDS

Document Format Ref


Title
Bond/ Interest Ledger BD/01
Interest/ Refund warrant BD/02
Statement of Underwriting Commission payable BD/03
Stationary Register BD//04
Reconciliation Statement of stationary in hand BD/05
Statement of Closing balance of stationary BD/06
Physical Verification report BD/07
Report on stationary to be destroyed BD/08
Report on stationary destroyed BD/09
Statement of Interest payable (series-wise) BD/MIR/01
Statement of Interest payable (bond holder-wise) BD/MIR/02
Statement of amount payable on redemption of bonds BD/MIR/03
Underwriting commission report (broker –wise) BD/MIR/04

Manual on Loan Accounting 0


BD/01
BOND / INTEREST LEDGER
FOR THE PERIOD ------------
Voucher Particulars Amount (Rs)
No Date Dr Cr
Opening Balance

Closing Balance

Manual on Loan Accounting 1


BD/02
INTEREST/REFUND WARRANT

Account No
FDR No Warrant No Not payable before (date)

Valid for --- months

Pay (Name of investor)------------------------------------------

Rupees (in words) ----------------------------------------

FDR No Warrant No Amount (Rs)

Authorised Signatory -----------------------

Note:
• The warrant should be crossed ‘Account Payee’
• The account No represents the type of payment (i.e. refund, monthly interest payment, quarterly interest payment, etc)

Manual on Loan Accounting 0


BD/03
STATEMENT OF UNDERWRITING COMMISSION PAYABLE
FOR THE MONTH ENDED ------------------------------------------
Bond Series ------------
Total No of Bonds ---------
Par Value -------------
Issue Value ------------
Closing date -----------
Broker Broker No of Bonds Amount Commission Commission Remarks
Name Code (Rs) (%) Amount

TOTAL

Prepared by ---------------------------- Approved by --------------------

Prepared by : Bond Section, CC

Note :
• The detailed computations to be prepared as per Form No BD/07

Manual on Loan Accounting 0


BD/04
STATIONARY REGISTER
FOR THE PERIOD -----------------------

Stationary Type : Bond Certificate/ Interest warrant/ Refund Warrant


Location : Store/ Office premises

Date Particulars Lot Receipts Issued Balance Signatures Remarks


No From To From To From To Issuing Receiving
Official Official

Note :
• The signatures of the official issuing and receiving the stationary should be recorded
• The register should be maintained for all pre-printed/ pre-signed stationary and at all locations
• The ‘particulars’ column should record the details of the receipt (received from printer/bank/ unused stationary at the end
of the day) and issue of stationary

Manual on Loan Accounting 1


BD/05
RECONCILIATION STATEMENT OF STATIONARY IN HAND
AS AT -------------------------

Stationary Type Nos


From To Total
Opening balance of stationary in hand
Stationary Received during the period
Stationary utilised/ cancelled during the period
Closing balance of stationary in hand

Signature
(official requesting the issue)
Note:
The reconciliation statement to be prepared based on the stationary register maintained

Manual on Loan Accounting 0


BD/06
STATEMENT OF CLOSING BALANCE OF STATIONARY
AS AT

Stationary Type Lot No Closing Balance (Nos)


From To Total

Authorised Signatory

Note:
• The statement to be prepared lot-wise based on the stationary register maintained

Manual on Loan Accounting 1


BD/07
PHYSICAL VERIFICATION REPORT
AS ON ---------------------
Stationary Lot No Balance as per Balance as per Discrepancy Remarks
Type Physical verification Stationary Register

Signatures -----------------------

Note:
• The signatures of the persons carrying out the verification and reviewing the report should be recorded

Manual on Loan Accounting 0


BD/08
REPORT ON STATIONARY TO BE DESTROYED
AS ON ------------------------
Stationary Type Series Nos (From --- to -----) Remarks

Authorised by -------------------------
--------------
Prepared by : Bond Section, CC

Note :
• The reasons for destruction of the stationary (say series redeemed, stationary mutilated, etc) to be stated in the
‘Remarks’ column

Manual on Loan Accounting 0


BD/09
REPORT ON STATIONARY DESTROYED
ON (specify date of destruction)------------------------
Stationary Type Series Nos (From --- to -----) Remarks

Authorised by -------------------------
--------------
Officials present during stock destruction : (Name & Signature)

Prepared by : Bond Section, CC

Note :
• In case any stationary that is required to be destroyed has not been destroyed then the reasons for the same should
be recorded in the remarks column

Manual on Loan Accounting 0


BD/MIR/01

STATEMENT OF INTEREST PAYABLE (series-wise)


FOR THE PERIOD -----------------------
Bond Series Bond Series Bond Series Bond Series Bond Series Total
-- -- -- -- --
Rate of Interest

TDS Rate
Total amount of
Bonds

Gross Interest
Payable (Rs) –
(a)

TDS (Rs) – (b)


Net Amount
Payable (Rs) –
(a)-(b)

Prepared by ----------------------------- Approved by -------------------------

Prepared by : Bond Section, CC


Distribution : Treasury Section
Note:
• This statement to be prepared periodically (as per the due dates for interest payment, to pass the
accounting entry for interest on bonds
• This statement prepared for the next year should be submitted to the Treasury Section at the beginning of
the year – for arrangement of funds
• The statement to be supported by a bond holder-wise details (as provided in the format BD/02A)

Manual on Loan Accounting 0


BD/MIR/02

STATEMENT OF INTEREST PAYABLE (BOND HOLDER-WISE)


FOR THE PERIOD -----------------------
Bond Series ----
Rate of Interest --------
TDS Rate ---------------
Regd Folio No Name No of Gross Interest Tax Deducted Net Amount Payable
No bonds (Rs) (Rs) (Rs)
held

TOTAL

Prepared by : Bond Section, CC

Note:
• This statement to be used for generation of Interest Warrants for individual bond holder

Manual on Loan Accounting 0


BD/MIR/03
STATEMENT OF AMOUNT PAYABLE ON REDEMPTION OF BONDS
FOR THE PERIOD -----------------

Bond Series --------------


Date of Maturity ----------
Total No of Bonds Issued ------------
Regd Folio Name No of Bonds Amount Interest payable on TDS Amount Net Amount
No No held (Rs) maturity (gross) payable
(5) +(6) –(7)
(1) (2) (3) (4) (5) (6) (7) (8)

TOTAL
Prepared by ------------------------------ Approved by ---------------------------

Prepared by : Bond Section, CC


Distribution : Treasury Section, CC

Note:
• In case of cummulative bonds, the interest for the bond period would be repayable on maturity
• In case of non-cummulative bonds the interest is to be paid after the last interest paid till the date of maturity
• This statement should be prepared at the beginning of the year for the redemption due during the period and
forward the same to the Treasury Section – for arrangement of the funds

Manual on Loan Accounting 1


BD/MIR/04
UNDERWRITING COMMISSION REPORT (BROKER –WISE)
FOR THE MONTH ENDED ------------------------------------------

Broker Name :
Broker Code :
Underwriting Commission (%) :
Application Name No of bonds Bond Amount Commission Remarks
No Certificate (Rs) Amount
No

Total

Prepared by --------------------------------- Approved by ---------------------

Note:
• This statement to be forwarded to the respective brokers along with the cheque for payment

Manual on Loan Accounting 2


FORMATS – PUBLIC DEPOSIT SCHEMES

Documents Format Ref.


Public Deposit/ Interest Ledger PD/01
Statement of deposits received and realised PD/02
Brokerage Report (Summary) PD/03
Brokerage Report (Broker-wise) PD/04
Statement of TDS payable (Depositor-wise) PD/05
Interest / Refund warrant PD/06
Statement of brokerage recovery due to premature withdrawal of PD/07
PDs
Stationary Register PD/08 A&B
Reconciliation statement of stationary in hand PD/09
Statement of closing balance of stationary PD/10
Physical Verification report PD/11
Statement of Interest payable (Scheme-wise Summary) PD/MIR/01
Statement of Interest payable (Depositor-wise) PD/MIR/02
Statement of Refund payable PD/MIR/03
Statement of PDs matured/ due for maturity PD/MIR/04
Statement of premature withdrawal of PDs PD/MIR/05

Manual on Loan Accounting 3


PD/01
PUBLIC DEPOSIT/ INTEREST LEDGER
FOR THE PERIOD ------------
Voucher Particulars Amount (Rs)
No Date Dr Cr
Opening Balance

Closing Balance

Manual on Loan Accounting 4


Manual on Loan Accounting 5
PD/02
STATEMENT OF PDs RECEIVED AND REALISED
FOR THE PERIOD ----------------------------
COLLECTION CENTRE -------------------------------
S.No Date of Application Name of the Scheme Amount DD/ cheque Remarks
receipt of No Applicant applied (Rs) No Date Drawn Date of
application (First Name ) for on realisation

TOTAL

Approved by ---------------------------------

Prepared By : F&A – Collection Centres


Distribution : PD Section, CC

Encl: Application Forms as stated above (----- Nos)


Bank statement for the period -------------------

Note : The statement to include only the details of those applications for which the DDs/cheques have been realised

Manual on Loan Accounting 0


PD/03
BROKERAGE REPORT (SUMMARY)
FOR THE MONTH ENDED ----------------------------
Lots covered from ------ to ----------
Renewals from ---------- to ---------
Broker Name Deposit Amount Brokerage Amount Remarks

TOTAL

Prepared by ------------------- Approved by --------------------------

Note: The detailed broker wise computations should be prepared as per PD/04

Manual on Loan Accounting 0


PD/04
BROKERAGE REPORT (BROKER –WISE)
FOR THE MONTH ENDED ------------------------------------------

Broker Name :
Broker Code :
Lot No ;

Application Name of F.D.R. No Realisation Scheme Deposit Brokerage Amount Remarks


No depositor Date Code Amount Gross Recovery Net Amount
(Rs) Amount (Rs) for pre- payable (Rs)
mature
withdrawal
(1) (2) (3) (4) (5) (6) (7) (8) (9) = (7)- (8) (10)

TOTAL
Prepared by ------------------- Approved by --------------------------

Note :
• This statement to be forwarded to the respective brokers along with the cheque for payment

Manual on Loan Accounting 0


PD/05
STATEMENT OF TAX DEDUCTED (DEPOSITOR-WISE)
FOR THE PERIOD -----------------------
Scheme ----

FDR No Name Date of Gross Interest Tax Deducted


warrant (Rs) (Rs)

TOTAL

Prepared by : PD Section, CC

Note:
• This statement to be used for transfer of TDS to GOI

Manual on Loan Accounting 0


PD/06
INTEREST/REFUND WARRANT

Account No
FDR No Warrant No Not payable before (date)

Valid for --- months

Pay (Name of investor)------------------------------------------

Rupees (in words) ----------------------------------------

FDR No Warrant No Amount (Rs)

Authorised Signatory -----------------------

Note:
• The warrant should be crossed ‘Account Payee’
• The account No represents the type of payment (i.e. refund, monthly interest payment, quarterly interest payment, etc)

Manual on Loan Accounting 0


PD/07
STATEMENT OF BROKERAGE RECOVERY DUE TO PREMATURE WITHDRAWAL OF PDS
For the period -------------------
Lot No -----------------------
S. FDR FDR Amount Investor Maturity Date of Broker % Brokerage Remarks
No No Date withdrawal Name Code Recovery Recoverable

Total

Prepared By ---------------------------------- Authorised By ------------------------------------------

Manual on Loan Accounting 0


Manual on Loan Accounting 0
PD/08 A
STATIONARY REGISTER

Stationary Type : PD Certificate/ Interest warrant/ Refund Warrant


Location : Office Premises

Dat Particulars Lot Stationary Stationary Balance Signatures Remarks


e No taken out used / (unused
Cancelled stationary)
From To From To From To Issuing Receiving Officials opening
Official Official and closing of
chest

Note :
• The signatures of the official issuing and receiving the stationary should be recorded
• The register should be maintained for all pre-printed/ pre-signed stationary and at all locations

Manual on Loan Accounting 0


Manual on Loan Accounting 0
PD/08 B
STATIONARY REGISTER

Stationary Type : PD Certificate/ Interest warrant/ Refund Warrant


Location : Store

Date Particulars Lot Receipts Stationary Balance Signatures Remarks


No Issued / (unused
Cancelled stationary)
From To From To From To Receiving Officials
Official opening and
closing of the
Strong Room

Note :
• The signatures of the official issuing and receiving the stationary should be recorded
• The register should be maintained for all pre-printed/ pre-signed stationary and at all locations
• The ‘particulars’ column should record the details of the receipt (received from printer/bank/ unused stationary at the end of
the day) and purpose for issue of stationary

Manual on Loan Accounting 0


PD/09
Reconciliation Statement of stationary

Sl. No Description Total Used/ Cumulative Cumulative Balance


Receipts cancelled Cancelled Used
(1) (2) (3) (4) (5) (6) (7)

Note : The columns 4, 5, 6 and 7 should be equal to column 3

Manual on Loan Accounting 0


PD/10
STATEMENT OF CLOSING BALANCE OF STATIONARY
AS AT

Stationary Type Closing Balance (Nos)


From To Total

Authorised Signatory

Note:
• The statement to be prepared lot-wise based on the stationary register
maintained

Manual on Loan Accounting 1


PD/11

PHYSICAL VERIFICATION REPORT


AS ON ---------------------
Stationary Lot No Balance as per Physical Balance as per Discrepancy Remarks
Type verification Stationary Register

Signatures -----------------------

Note:
• The signatures of the persons carrying out the verification and reviewing the report should be recorded

Manual on Loan Accounting 0


PD/MIR/01

STATEMENT OF INTEREST PAYABLE


FOR THE PERIOD -----------------------

Scheme -- Scheme -- Scheme -- Scheme -- Scheme -- Total


Total Interest
for the period
(A)

TDS (B)

Net Amount
Payable (A-B)

Prepared by : PD Section, CC
Distribution : Treasury Section, CC

Note:
• This statement is a summary of the scheme-wise details as per PD/06A
• This statement would be prepared based on the PDs as on the date which could undergo changes on
account of deposits received/ withdrawals

Manual on Loan Accounting 0


PD/MIR/02A

STATEMENT OF INTEREST PAYABLE (DEPOSITOR-WISE)


FOR THE PERIOD -----------------------
Scheme ----

FDR No Name Gross Interest Tax mount Payable


(Rs) Deducted (Rs)
(Rs)

TOTAL

Prepared by : PD Section, CC

Note:
• This statement to be used for generation of Interest Warrants

Manual on Loan Accounting 1


MIR/02B

STATEMENT OF INTEREST PAYABLE (DEPOSITOR-WISE)


FOR THE PERIOD -----------------------
Scheme ----

S. No FDR No Investor Interest Period From – to ----mount


Name Warrant No (Rs)

TOTAL

Prepared by : PD Section, CC

Note:
• This statement to be used for transfer of funds to the Bank

Manual on Loan Accounting 2


PD/MIR/03

STATEMENT OF REFUND PAYMENT


FOR THE PERIOD FROM ----------TO -----------

Sl. No FDR No Refund Warrant Total Amount Payable


(Rs)
No Date

Scheme Total

Scheme Total

Scheme Total

Grand Total
Prepared by: PD Section, CC

Manual on Loan Accounting 3


PD/MIR/04

STATEMENT OF PDs MATURED/ DUE FOR MATURITY


FOR THE PERIOD FROM ----------TO -----------

Sl. No Month Deposits maturing for Amount Payable


payment

TOTAL
Prepared by : PD Section, CC
Distribution : Treasury Section, CC

Note:
• This statement would be based on the PDs existing at the time of
preparation of the statement but could change due to premature
withdrawals of PDs
• Date-wise and scheme-wise sub totals should also be provided
• The report to be furnished to the Treasury Section for arrangement of
funds

Manual on Loan Accounting 4


PDMIR/05
STATEMENT OF PREMATURE WITHDRAWAL OF PDS
For the period -------------------
Lot No -----------------------
S. FDR FDR Amount Investor Maturity Date of Interest Gross TDS Net Amount Unencashed Broker
No No Date withdrawal Amount Amount Payable Interest
recoverable/ payable warrants
payable returned

Total

Prepared By ---------------------------------- Authorised By ------------------------------------------

Manual on Loan Accounting 5


Manual on Loan Accounting 0