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BANKING OPERATIONS DAY-2 SESSION -2

GOVERNMENT PAYMENTS PROCESSES

MODES OF GOVERNMENT PAYMENTS

1.Cash Payments

2.Through Clearing

3.Transfer

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MODES OF GOVERNMENT PAYMENTS

The following are the main modes of Government Payments:

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Sr. MODE REMARKS

1 Cash Payment against instrument is made in cash.

2 Clearing Payment against instrument is made through credit to presenting Bank Account.

3 Transfer One Government Account is Debited and there against another Account is Credited.

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PASSING POWERS (PARA 358 BD MANUAL)

Group of officers Cash Clearing Transfer

OG-1 Jointly with Asstt / Sr. Asstt /OG-1

Up to Rs. 20,000/-

Up to Rs. 40,000/-

Up to Rs. 40,000/-

OG-2 Jointly with OG-1

Up to Rs. 1 million

Up to Rs. 2 million

Up to Rs. 2 million

*OG-3 Jointly with OG-2/OG-1

Up to Rs.100 million

Up to Rs.100 million

Unlimited

Divisional Head Jointly with OG-2/OG-3

Above Rs. 100 million & Up to 500 million

Above Rs. 100 million & Up to 500 million

Chief Manager Jointly with OG-2/ACM

Above Rs. 500 million

Above Rs. 500 million

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GENERAL PRECAUTIONS BEFORE PASSING INSTRUMENTS

The Cheque / bill is drawn on the office of the Bank where it is presented

Cheque is signed properly Schedule of the instrument has been received Matching the particulars of cheque with schedul

e. Marking of Schedule Where cheques have been drawn on assignment

accounts it should be ensured that sufficient credit balance is available in the account to meet the payment and the Cheque has been drawn in the strict conformity with the instructions governing operations on that account.

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GENERAL PRECAUTIONS......

The Cheque /bill is neither stale nor post dated.Government Cheques remain current for 3 months after the month of their issue. However their validity will be expired at the end of financial yearWhile bills generally remain current for a period of 30 days.Income Tax refund , Sales Tax refund (Only in Islamabad)orders remain current during the year of the issue and would lapse on 30th June every year.\

Cheque / bill is free from stoppage. The Cheque /bill has been signed by

an authorized officer

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GENERAL PRECAUTIONS......

Cheque series has been intimated Amount in words and figures agrees There is no over-writing on the Cheque /bill (FTR

161) There are no additions ,alterations , correction,

overwriting in the Cheque /bill. The cheque is not mutilated The protective cross entry, except in the case of

Cheques which are typed on perforating machine  (Rule 156)

Cheque is not crossed if presented for cash payment

Clearing stamps affixed if presented through clearing

SCHEDULE & ITS MARKING

Scrutiny of schedules

Filling schedule date wise

Marking on payment as well as on stoppage

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SCRUTINY OF THE INSTRUMENTS

face

• Drawn on office• Words & figure• Properly signed• No

Overwriting/alteration

• Not mutilated• Protective cross

entry

validity

• Stale/post dated

• Stoppage free

endorsement

• Collecting banker’s discharge

• Payees discharge

Others : in addition to above checking schedule/ Advice and cheque book intimation. Applying checks as prescribed in para 420 of BD manual

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CASH PAYMENT PROCESS (PAD COUNTER) All Govt. instruments/Cheques meant for cash

payments will be presented on PAD counter PAD staff/counter official will receive the cheques

and conduct the scrutiny/technical examination as prescribed in Para 420 of BD Manual

Identification of presenter DDO/Authorised cashier from cashier card/identity card

Taking the signatures of the presenter on the back of the check

Matching with attested signatures Inscribing the initials by token officer to the effect

that identification has been verified Token will be issued to the presenter and token

number will be written on the back of the cheque

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CASH PAYMENT PROCESS.....PROCESSING OF INSTRUMENT AT PAD

The cheque would be delivered to the concerned official for marking schedule who after proper scrutiny will record the effect on the cheque under his initials.

The cheque will be passed to the concerned authorized official for scrutiny/verification of signatures and initial level passing as prescribed in BD manual Para 420

The cheque will be forwarded to Passing Officer for authorizing the payment who will inscribe his signatures under the PAY CASH stamp after applying all the relevant cheques as prescribed BD Manual.

Cancellation of drawer’s signature.

When the cheque is duly passed, same would be input in the Globus Banking System in the proper version

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CASH PAYMENT PROCESS.....

All types of override messages will be supervised

Accounting entry in Globus Banking System DR Relevant Govt. Account CR Intermediary Account (Hard

Coded) Transaction number generated by globus will

be written on the back of cheque/instrument. Passed cheque delivered to Cash counter for

cash payment.

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PROCESSING AT CASH COUNTER Scrutinize the instrument to ensure that the

signature of the passing official of PAD Payment is in order and genuine

Cash Official (Inputter) will open the transaction in the prescribed version by feeding the transaction number written on the back of cheque/instrument .

Enter (input) the denominations in the prescribed version and will commit the transaction.

Cheque would be passed on to the Supervisor for authorizing the transaction who will authorize the transaction by verifying the facts.

Cash would be paid to the presenter of the cheque against surrender of the token and proper identification as per prescribed procedures.

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CASH CHEQUE

CASH PAYMENT CHEQUE SAMPLE

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PROCESSING AT CASH COUNTER

Branding “Paid in Cash” rubber stamp and initial of Paying officer

Balancing of cash Delivery of instruments and tokens to PAU Intimation of total amount to PAU Matching of paid instruments with Globus

Cash Scroll report in form Bkg.185 in respect of different Department of the Governments

Signing of Scroll

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PAYMENTS THROUGH CLEARING

On receipt of cheques from NIFT same are tallied with NIFT Sheets . Any discrepancy is immediately intimated to NIFT

Marking of Schedule Applying of the same checks as are

applied to the instruments for cash payments (Para 420 of BD manual)

Clearing Stamp and branch endorsement should be there .

Scrutiny of the cheque by an official under his initial in the clearing stamp

Endorsement Issues

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PAYMENTS THROUGH CLEARING

Passing the cheque by an authorized official under his initial in the clearing stamp

Cancel the signature of the drawer If Cheques drawn on assignment account

it should be ensured that sufficient credit balance is available

Inputting Authorization in Globus Care for override messages in Globus Generation of scroll & abstracts.

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CLEARING CHEQUE

CLEARING CHEQUE SAMPLE

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PAYMENTS THROUGH CLEARING CONT...

NOTICING IRREGULARITY AFTER CLEARING PROCESS

In case any irregularity is detected in any clearing Cheque/bill after the clearing process is over or a Cheque/bill containing an irregularity could not through oversight be pushed through the return clearing the fact should immediately be brought in to the notice of the Assistant Chief Manager.

Reversal of the entry Passing of new entry wherein the commercial bank

Account is debited and composite NIFT(LHR NIFT) would be credited

Immediate intimation to the bank concerned on phone as well as through fax to avoid payment its end

Delivery of the instrument to the commercial bank

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PAYMENTS THROUGH TRANSFER

Payments Through TRANSFER

Transfer Cheque sample

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INSTRUMENTS RETURNED UNDER OBJECTIONS

Cheques Referred and Returned Register in form No. Bkg.46

Particulars of the cheque to be returned together with reasons for its return will be entered in this register

Objection memo with cheque and the register will be put up to the Assistant Chief Manager for checking the entries in the Register and signing the memorandum.

There must be a valid reason for returning a cheque. Returning the cheque on invalid reason may be damaging

Care should be made that no cheque is returned twice with the same objections.

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OBJECTION MEMO

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SOME COMMON OBJECTIONS ON CHEQUES

Not drawn on us Schedule not received Payees name differ with schedule Effects not clear Drawer signature differs Cheque is unsigned Alteration /correction in cheques is not

accepted Cheque is post dated Undated cheque Date is irregular such as 31 April.

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SOME COMMON OBJECTIONS ON CHEQUES Stale cheque Amount in words figures differ Cross cheque must be presented through clearing

(if receives on cash counter) Overwriting not acceptable Cheque not in register Payment stopped by the drawer. Bank clearing stamp required (if presented through

clearing) Bank’s discharge required (in Clearing) Cheque is mutilated Balance not available

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REVERSAL OF ENTRIES IN SYSTEM

Reversal before EOD

Adjustment after EOD

Zero level authorization

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INCOME TAX REFUND ORDERS

Non-negotiable instruments payable to the payee or his banker on certification that amount will be placed to the payee’s credit on realization

The Income-tax/Sales-tax Refund Orders are issued in the form prescribed in the Income Tax Manual by the authorized Income Tax/Sales Tax Officers whose specimen signatures are recorded with the Bank

The number of the Refund Orders book and the serial numbers of the Refund Orders are be advised.

An advice in the prescribed form containing full particulars of the Refund Order viz., its number, date of issue, amount, name of the payee is also invariably issued over the signature of the authorized Income Tax Officer

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INCOME TAX REFUND ORDERS….PRECAUTIONS It belongs to the Refund Order book Verification of the signature of Drawer Verification of particulars of Refund Order with Refund Orders Issue

advice. It should be ensured that advices are genuine, the amounts in

words and figures agree and the number of the Refund Order given on advice is from the Refund Order book advised

Advice number is mentioned on Refund order Advice numbers used by Income Tax department should be

communicated to the offices in the same way as Refund order numbers are communicate

Crossing on the face of instrument clearly mention that it is a non-negotiable instrument

NTN No., year of assessment and joint signature of refund officer and Inspecting Assistant Commissioner or Additional commissioner over the refund cheque beyond Rs. 100,000/- is essentially required

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REFUND OF INCOME TAX VOUCHER

Validity

Segregation of Income Tax Voucher up to Rs.10,000/ & above Rs.10,000/

Separate refund book

Countersignature

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PAYMENTS TO RAILWAY

1. Current account III2. Pension account “Central XVII Railways – Pay & Pension Account” Cheques from PR are specifically marked with “Salary Only”

or “Pension Only”. BSC field offices to submit separate debit scrolls along with

paid cheques 3.PSDP Account XVIII Separate list of signatories Separate cheque series Stamped with only for PSDP No special authority

No overdraft in any of Railway Account.

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PAYMENTS TO RAILWAY

“Central XVII Railways – Pay & Pension Account” authorized signatories cards of PR staff who are

authorized for disbursement of salaries and pensions

cheques from PR in this new accounts that are specifically marked with “Salary Only” or “Pension Only”.

where no such stamp is found on cheque, the cheque will be paid from Account III

BSC field offices to submit separate debit scrolls along with paid cheques

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DAILY REPORTS OF PAYMENT

Sr. NO GOVERNMENT PAYMENT REPORTS

1 Scroll

2 Abstract

3 Treasury Sheet

4 Government Balance reporting to HOK

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IDENTIFICATION OF THE PRESENTER

In case the Cheque/bill is found prima facie in order, the token official will proceed with the identification of the presenter in the following manner:

1. If the payee is holding an identity card and an authority letter duly registered with the Bank issued to him by a Government Department, Local authority etc. bearing his attested photograph and specimen signature with the seal of the issuing Department affixed thereon as provided in Rule 430 of the Federal Government Treasury Rules Vol. I, the payee’s identity will be established by comparing his photograph with his person and his discharge signature on the instrument with the specimen appearing on the identity card. Particulars of the identity card such as its number, date of issue and the name of issuing department will be noted down by the counter official below the discharge receipt obtained by him from the payee under his initials. A register in form Bkg. 211 shall be maintained for the purpose of registering the Identity Cards of the Cashiers/Messengers of the Government Department/Banks/Local Authority etc. at the Public Accounts Unit.

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IDENTIFICATION OF THE PRESENTER

2. If the payee’s discharge signature has been attested by a person known to the Bank the counter official shall obtain a fresh discharge receipt of the payee on the back of the instrument in his presence and compare the latter signature with the attested, to ensure that the two agree. He will also verify the attesting person’s signature on the instrument with his specimen recorded with the Bank. The counter official will put his dated initials below the discharge signature of the payee obtained by him at the counter.

3. If the payee is identified by an OG-2/Treasury Officer of the Bank they will attest the payees discharge signature on the back of the instrument over their full signature. The counter official will obtain a fresh discharge signature of the payee in his presence and if the two signatures of the payee agree and the signature of the attesting employee of the Bank mentioned above is found to be in order by the counter Incharge he will put his dated initials below the last signature of the payee.

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MAINTENANCE OF TOKENS

A few Tokens will be issued ACM to each counter against acknowledgement and full account obtained from them in the evening.

Tokens issued to the parties by counter staff Surrendered by them to the Cash Department at the time

of receiving payments Cash division will return in the evening In case any token is lost by any party this effect is

immediately documented Payment to the party will not be made unless his identity is

established beyond doubt Indemnity bond Penalty an amount of Rs.300/-