Role of Administrative Departments

Government in its consolidated GR dated 31-12-1988, has narrated complete guidelines regarding policy of sanctioning guarantees, procedure to be followed in considering proposal of guarantees, channel of submission and decision taking levels, execution of guarantee deed agreement, provisions relating to guarantee fees, recovery of guarantee fees, vacation of guarantees, instructions regarding follow up actions to be taken by the administrative department as well as standardized formats for maintaining records related to guarantees. Thereafter, government has issued various instructions / guidelines relating to government guarantees from time to time. Government has vide circular dated 29/11/2002 revised the Annexure I, III and IV issued vide GR dt.31-12-1998 and formulated the Model GR as regards to issuance of the State Government Guarantees considering major aspects in order to safeguard the interest of the Government. Administrative Departments shall draft the guarantee orders on the line of the Model GR, considering the clauses applicable and would execute the documents as per the revised format. Finance Department has instructed concerned PSUs/Organisations and administrative departments to give priority on repayment of guaranteed debt.

Maintaining Record (Database)

The administrative departments are required to maintain registers related to outstanding guarantees, outstanding guaranteed loans, recovery of guarantee fees and recovery of Government dues. Administrative Departments are also required to update the same by reconciling the data with the concerned institutions. At the same time, information relating to outstanding guaranteed debts against the guarantees should also be maintained, so that the effective guarantee could be known at the end of each financial year. Government also allows partial vacation of guarantees to the extent of loans repaid. Administrative departments are anticipated to maintain the Loan account details for guaranteed loans to ensure the effective management of partial vacation of guarantees and to verify the status of outstanding Guarantee.

The administrative departments are required to follow the guidelines relating to government guarantees issued from time to time by finance department and should keep themselves updated with latest status of the guarantees in all respects. Monitoring of repayment of guaranteed debts should be done monthly basis by the administrative departments.

Administrative Department shall ensure that the upfront guarantee fees are paid in advance after approval of fresh guarantee and payment shall be informed to Finance Department with copy of chalan along with draft of Guarantee sectioning Resolution submitted for vetting. For the subsequent years, the guarantee fee shall be recovered within a period of one month from 1st April of subsequent year on outstanding balance of Guarantee as on 31st March of the previous year, till the guarantee is vacated.

Timely reconciliation of outstanding guarantees / outstanding loans / recovery of guarantee fees etc. should be carried out by the administrative departments invariably with the concerned institutions, Finance department as well as the office of the Accountant General.

Reconciliation as well as monitoring of state government guarantees by the concerned administrative department is the precondition in maintaining perfect database. At the same time, timely reporting to the finance department is expected from the administrative departments.