Form of Drafts
- Drafts shall be issued in special forms to be obtained from the Currency Officer under Rule 420 below.
- Immediately on receipt of a parcel of forms of Drafts, they shall be carefully examined by the Treasury Officer and a proper acknowledgment sent to the Currency Officer. The acknowledgment shall certify that the forms have been counted and found correct.
389.The forms of Drafts and of advices (Rule 393 below) shall be placed in store under the key of the Treasury Officer who should each morning issue for book or books containing Draft Forms and the Advice Forms, for the day’s use. He must be careful not to issue a book of a later serial number before an earlier, and therefore should see that the store is so arranged as to prevent mistakes. Every evening the unused forms will be returned to him, and he should see that this series is unbroken, that no form is kept back unissued unless it be spoilt and that the number of Draft Forms expended in the day agrees with the total number listed in the “Schedule of the Reserve Bank of India Remittance Drawn” for the day. (Rule 407 below)
Officers signing drafts shall destroy spoilt Draft Forms after noting in the remarks column of the Issue-cum—Drawing Schedule Register (Form T.A. 18 or 18A in the Kerala Account Code, Vol. II) under their full signature the printed numbers of the forms destroyed and certifying that the forms have been cancelled and destroyed.
Issue of Drafts
- A person requiring a Draft shall tender with the money a formal application in prescribed form, which may be obtained from the treasury. The application form duly filled in will serve as a chalan for the money tendered. The application shall be retained by the Treasury Officer for transmission to the Accountant General along with the daily “Schedule of Reserve Bank of India Remittances Drawn”. (Rule 407 below)
NOTE 1—A person applying for a Draft on behalf of the Government or a Local Fund should certify on the application that the Draft is wanted for bona fide public purposes and describe the object of the remittance. If the Treasury Officer doubts whether the object is really public, he should state his doubt to the applicant or take the orders of the Collector. Questionable grants should be reported to the Currency Officer with a view to the issue of instructions for future guidance.
NOTE 2—When the purchaser of the Draft(=DD) demands a receipt for the amount of the Draft and the exchange charges thereon, the Treasury Officer may grant the purchaser a receipt in the form prescribed by the Reserve Bank for the purpose.
391.Drafts shall be prepared and signed from time to time as they are applied for, immediately on the receipt of cash or its equivalent; the business of signing them must not be postponed till the close of office, and on no account may the office be closed till all Drafts applied for have been issued. Each must be signed legibly with the full signature of the Treasury Officer.
- 392. At the time of signature of a Draft(=DD), the Register (Form T.A. 18A in the Kerala Account Code, Volume II), together with the application for the Draft, the advice (Rule 393 below) and the book of forms shall be laid together before the Treasury Officer. The Treasury Officer shall initial each entry in the Advice and the corresponding entry in the register at the same time as he signs the Drafts after he has satisfied himself that¬
(i) the several documents agree,
(ii) the authority for issue is sufficient,
(iii) the date and office of issue and the name of the payee are legibly and distinctly entered in the body of the Draft,
(iv) in addition to the amount being entered in figures, the amount of whole rupees is entered as second time in words and fractions of a rupee in words or figures, that words are written continuously without lifting the pen and that when the amount consists of rupees only and does not contain fractions of a rupee, the words end with the word “only”, and
(v) a sum a little in excess of that for which the draft is granted is entered in words across the Draft at right angles to the type.
NOTE 1—“Under thirty rupees” will mean that the Draft is for a sum not less than `. 20 but less than ` 30, and similarly, “under eight hundred rupees” will mean that it is for less than ` 800, but not less than `. 700.
NOTE 2—The cross entry is not necessary if the amount in words is typed perforated by a special cheque writing machine.
Advice of Remittances drawn
- An advice of all drawings effected on a particular treasury or the Bank on any particular date shall be sent to the treasury or the office drawn upon in the special form prescribed by the Reserve Bank. The Advices shall be completed, signed and despatched by the Treasury Officer before the treasury closes on the day of issue.
Advices of drafts drawn on the Bank shall be sent direct to the Manager or Agent as the case may be, of the Bank.
NOTE—Whenever two or more sheets are used for advising the issue of Drafts, each such sheet should be signed by the Treasury Officer.
- 394. If alterations be made in a Draft prior to issue, the corrections shall be noted in the Advice and each alteration, both in Draft and Advice, shall be authenticated by the drawer’s full signature in order to prevent hesitation, on the part of the drawee. If the drawer should enter the amount so carelessly as to enable a stranger to alter it and fraudulently to obtain payment of a larger amount, the drawer, and not the drawee, must bear the loss. But the Treasury Officer drawn on must remember and apply the numerous defensive checks provided for him by these rules.
Regularity of Signature
395.Variation in the signature of the drawer often entails much trouble on the paying office, and the drawer will be held responsible for inconvenience or delay which may be caused to individuals in consequence of change in, or illegibility of, his signature, or other serious irregularity on the face of the draft, as the drawee would be justified in suspending payment in cases of doubt arising from such cases. An officer in charge of a treasury shall sign his name in English, or have it written in English characters below the signature in any Indian script.
- When any change of Treasury Officer occurs, a specimen of the signature of the relieving officer shall be forwarded by the outgoing officer to all officers usually drawn on. The following form will be convenient
“ The undersigned writes to notify to ……………………………… that he has on this day been relieved of the executive charge of the treasury at ………………………. by …………………………… a specimen of whose signature is annexed. …………………
……………………………….
Relieved Officer
……………………………….
The…………..20….. Relieving Officer.”
NOTE 1—If it should be necessary for a Treasury Officer to draw on a treasury or an office not usually drawn upon, to which a specimen of his signature has not been sent under the provisions of this rule, heshould, at the time of issue of a draft, also forward a specimen of his signature under a special forwarding letter duly stamped with the seal of the treasury, which should be posted on the same day in a separate cover and not in the cover containing the Advice.
NOTE 2—In the case of an officer who signs in any Indian script, his name should also be written in English characters in the notice, as well as after his signature.
NOTE 3—When an officer who was formerly in charge of a treasury resumes charge of it after a lapse of time, his signature need not again be circulated among treasury and other offices.
Encashment of Drafts
- The Advices received from the issuing treasuries of the Bank shall be opened in the presence of the Treasury Officer, and each dated and initialled by him after he has satisfied himself of its genuineness by examining the signature of the drawer and, if necessary, the post mark. They shall then be sorted and arranged accordingly to the offices from which they are received and pasted chronologically in guard files in such a way that advices received from each drawing office may be kept together. These files shall be kept under lock and key.
NOTE 1—The Treasury Officers should particularly guard against the possibility of the fraud of altering after signature the amount shown in the Advice, by a comparison of the total amount reported in words in the heading with the real total of the figured amounts of an Advice. Any alteration of any entry, whether of names of figures, in an Advice requires the drawer’s full signature, so that it is scarcely possible that any fraud should be attempted by altering the Advice before he has signed it, since at the time of signing he would notice any uncertified correction.
NOTE 2—All covers containing “Advices of remittances sold” received from the issuing treasuries or the Bank shall be superscribed with the words “Remittance Advice”.
- The Advices arranged in the manner prescribed in the last preceding rule will facilitate the examination and identification of Drafts, etc.,presented for payment. The entries made in an Advice should be such as to place sufficient obstacle to the encashment of Drafts forged or fraudulently altered, and their sequence should effectually bar the use, a second time, of a particular serial number, and suggest suspicion even of the Advice where a high number follows a low one.
Necessary notes of references touching irregularities of cancellation, issue of certificates of non-payment, Advices of seconds or thirds, and of any other points of importance shall be made on the Advice.
- (a) On a Draft being presented for encashment, the Treasury Officer shall compare it with the Advice, and satisfy himself carefully that it is in order and that it is receipted on the back by a person able to give a legal quittance. It must be borne in mind that in the case of a Draft on Government account the liability to the payee named in the Draft can only be discharged by payment to—
(1) the payee or his lawful agent on identification, or
(2) The payee’s banker who should certify that the amount has been placed to the payee’s credit, or
(3) a person holding a letter of authority from the payee, whose signature must be known to the Treasury Officer and if the letter directs to the Treasury Officer to pay the money to a certain named person, that person must be identified to the Treasury Officer before payment can be made. The only endorsement on such a Draft should be payee’s receipt or that of his lawful agent.
(b) In all other cases where payment is not made on an endorsement in favour of a recognized bank, the Treasury Officer shall not only satisfy himself of the genuineness of the claimant’s signature to the receipt on the back of a Draft but, if the claimant himself is not in attendance, he must assure himself that the presenter of the Draft is the agent or messenger of the legal holder, duly authorized to receive the payment. If the presenter is unknown to the treasury officials, or, if known, should there be reasonable grounds for questioning his being in lawful possession of the Draft, the Treasury Officer shall demand a letter from the legal holder, authorizing the presenter to receive payment on his behalf. Similarly, in cases where payment is made on an endorsement to a recognized bank, the Treasury Officer must assure himself that the presenter of the Draft is the authorized agent or messenger of the Bank.
NOTE 1— The term “recognized bank” referred to in this Rule includes a scheduled bank under the Reserve Bank of India Act, 1934, or a bank or firm mentioned in Appendix 9.
NOTE 2—The letter of authority for receiving payment at the treasury referred to in this rule in not liable to stamp duty.
- 400. Drafts payable at the District Treasury cannot be endorsed for payment at a Sub Treasury. But if the money payable on a Draft is required at a Sub Treasury and the remittance cannot be effected in accordance with the procedure laid down in Rule 416 below, a cash order may be issued to the payee for presentation at the Sub Treasury. In such a case the payee must receipt the Draft as “Received payment by a cash order on ………………… Sub Treasury”, and the Treasury Officer at the District Treasury shall finally deal with the Draft and take the same precautions regarding the delivery of the cash order as are prescribed in Rule 401 below for payment in cash.
- Before issuing pay orders on a Draft the Treasury Officer shall satisfy himself that the Draft has been advised; that it corresponds in all particulars with the Advice; that it bears the genuine signature of the drawer; that it has not been tampered with; and that it is not a cancelled or lapsed Draft or one of which a duplicate has been paid. A Draft may be paid—
(i) without Advice, if there is no reason whatsoever to doubt its genuineness, and if sufficient security is offered. In the case of well known and reliable holders, this security may be dispensed with at the discretion of the Treasury Officer. The Treasury Officer shall in all such cases apply for the necessary Advice without delay.
(ii) even though differing from the Advice, at the discretion of the Treasury Officer, provided there is no suspicion of fraudulent alteration, nor any possible doubt of the genuineness of the Draft. Special caution shall be exercised before paying on a Draft an amount larger than that named in the Advice.
- As each Draft or Telegraphic Transfer drawn by the Treasury is paid, it must be stamped “paid”, the date of payment being at the same time noted in the Advice under the initials of the Treasury Officer.
- Doubtful drawings.—In case of erasure, alteration or other serious cause for suspicion, the Treasury Officer shall, before payment, refer to the drawer, the post office, or the Currency Officer, as the case may require. Any
- Form of receipt.—For the sufficiency of the receipt, it is necessary to see that it is not for a part only of the Draft, and that it is given by the legal holder. On no account may a Draft be paid by instalment; receipt for the full amount must be given on the reverse, and the full amount must be paid—
(a) if the legal holder be dead, payment can be made only to his legal representative; a Draft for less than ` 100 may, however, be paid without a certificate of administration.
(b) if the receipt be signed by an agent or attorney, note of the existence, and of the record in the treasury, of the power of attorney, should be made on the Draft.
(c) if more than one person be named in a Draft, all must join in order to give a valid endorsement or receipt.
(d) Draft payable to A.B. cannot be cashed on the receipt of his partner
C.D. without production of a formal power of attorney; a bill payable to A.B. and Co. can be paid on the receipt as A.B. and Co. of any member of the firm.
(e) Drafts payable to an incorporated company of any other corporate body may be paid on the receipt of the official authorized, generally or specially, by it regulations or by power of attorney to receive moneys payable to such company or body.
In the case of Draft payable to an unincorporated body, payment may be made to a person holding authority to receive moneys payable to such body, but the Treasury Officer shall first satisfy himself that the authority has been duly conferred.
(f) A government officer when he sends a Draft to a treasury not for cash payment, but for credit of its amount in the treasury accounts, must, before he signs the receipt, add to the words “Received payment” the further words “by transfer credit to……….”. Omission to do this facilitates fraudulent appropriation of the money.
(iv) Record of Drawings and Encashments
𝗤34. On no account may a draft be paid by instalment, receipt for the full amount must be given on the reverse, and the full amount must be paid
A:-Rule 401 KTC Vol. 1
B:-Rule 402 KTC Vol. 1
C:-Rule 403 KTC Vol. 1
D:-Rule 404 KTC Vol. 1
Correct Answer:- Option-D:-Rule 404 KTC Vol. 1
- A record of Telegraphic Transfers and Drafts drawn by the treasury will be kept in a register (Form T.A. 18 or 18A) in accordance with the directions contained in this behalf in the Kerala Account Code, Volume II.
- 406. As each Draft or Telegraphic Transfer is paid, entry must be made in the Register of Reserve Bank of India Remittances Encashed (Form T.A. 19 in the Kerala Account Code, Volume II).
- At the close of each day, separate schedules for drawings and encashments during the day will be prepared in special forms prescribed by the Reserve Bank for submission to the Accountant General in accordance with the directions contained in the Kerala Account Code, Volume II. The application forms for remittances drawn and also the receipted Drafts and the payees’ receipts in respect of Telegraphic transfers encashed shall accompany the schedules mentioned above.
- 408. The following are the cross-checks which the Treasury Officer shall, each evening, apply to the several documents connected with remittances drawn and encashed. The registers of remittances drawn and encashed and the connected schedules check one another directly; the total of each schedule must agree with total receipts or total payments for the day as booked under the head “Reserve Bank of India Remittances” in the cash book, after allowing for receipts and payments, if any Sub Treasuries which will be entered under a separate sub head. The total of the several Advices for the day must also agree with the total in the column “Amount” in the schedule of drawings, and this agreement shall be, at times, checked by the Treasury Officer himself.
- Where the name of the payee and/or endorsee appears on the instrument in English and the signature is made in English, the Treasury Officer should, in addition to the precautions prescribed in the Rules for making payment to the proper person on identification, see that the signature tallies letter for letter with the name as spelt on the instrument. Where the name of the payee or endorsee is spelt incorrectly, the spelling of the endorsement must correspond with that of the mis-spelt name, but if the payee wishes, he may add his correct name in brackets.
(v) Other Rules
- Issue of duplicates.—When satisfactory evidence has been given that a draft has been either lost or destroyed, and application is made within a reasonable period after issue but before it has lapsed (Rule 419 below) a duplicate may, without reference to the Currency Officer, be grantedto the party who obtained the original, or to the payee, or to the legal representative of either but to no other person. If the draft could not have been presented for payment within three months, it will be necessary for the applicant to produce a certificate of non-payment from the drawee; but the issue of this certificate will be no bar to the payment of the lost Draft, if presented before duplicate is paid.
In the event of the loss of both original and duplicate, a triplicate may be issued on the same terms as the duplicate, the nonpayment of the others being certified. Neither duplicate nor triplicate can be issued without reference to the Currency Officer, if the Draft has lapsed (Rule 419 below). Issue of duplicate or triplicate shall be promptly advised to the drawee, in order that proper note may be made on the advice originally received.
411. The duplicate and triplicate shall be drawn in exactly the same terms as the original instrument with the same date, the same number, the same amount, and the name of the same payee, so that, if a lost Draft has been endorsed, the endorsee must apply for a duplicate through the original payee. It will be issued under the signature of the officer in charge of the treasury at the time, although he be not the person who signed the original Draft.
NOTE 1—Where the remitter is a department of the Government or a Local
Fund, the issue of a duplicate against an unstamped Letter of
Undertaking as given below, will be permissible.
LETTER OF UNDERTAKING Place……………….………… Dated…………………………. To …………………….……..
……………………………. Dear Sir, In co.nsideration of your agreeing to issue a duplicate of Reserve Bank
of India draft bearing No………….and dated ……………….for `…………… (Rupees …………………..) which has been lost, I hereby undertake that, in the event of payment being obtained from the Reserve Bank on the original draft or of the Bank incurring any expense and/or loss by reason of the issue of the duplicate, I shall reimburse the Reserve Bank to the extent of the amount paid on the original draft and any expense and/or loss incurred as aforesaid. Yours faithfully, (……………..……….) Signature (…………………..…………)
Office Seal Name and designation of the Officer executing the letter.
NOTE 2—When it is necessary to issue duplicates, the word “duplicate” should be prominently written in red ink on the face of ordinary draft forms and the relative advice forms. The duplicate should be issued only after the issuing officer has satisfied himself that the original has not been paid.
412. No duplicate or triplicate older than six months shall be paid without previous reference to the Currency Officer.
413. Cancellation and Refund.—No Draft can be cancelled without surrender of the whole set. Thus, if a duplicate or a triplicate has been issued the Draft can be cancelled only if the original together with the duplicate (and the triplicate if issued) be surrendered. Consequently, no refund can be made on a lost Draft; a duplicate must be obtained and payment taken at the treasury or office drawn on.
414. All parts being surrendered, a Draft may be cancelled and its amount refunded at the discretion of the Treasury Officer, on the application and receipt of the remitter in the case of a Draft on Government account and of the payee in the case of other Drafts. If, in the latter case, the receipt of the payee cannot be obtained, the remitter’s application for cancellation, with explanation of the reasons for his request, and of the difficulty in the way of obtaining the payee’s signature, shall be submitted for orders of the Currency Officer. Although no difficulty should be made about cancellation of Drafts on Government account, it must be clearly understood that other classes of Drafts can be cancelled only as an indulgence, and for sufficient cause shown. No exchange which has been levied can be refunded.
NOTE— If alteration of the name only of the payee is required by remitter, it will suffice for the drawer to alter the name in the Draft under his full signature and send advice to the drawee.
415. When a Draft is cancelled, the fact of cancellation shall be conspicuously noted across the face of the Draft; at the same time an intimation shall be sent to the office drawn on, in order that the fact may be recorded in the advice originally received and necessary precautions taken against the payment of the cancelled Draft. The cancelled Drafts shall be duly receipted by the remitter or the payee, as the case may be.
NOTE— The amount refunded will be entered in the “Register of Reserve Bank of India Remittances Encashed” and also in the proper columns of the schedule of such encashments for the day on which the cancellation takes place, in accordance with the directions contained in this behalf in the Kerala Account Code, Volume II.
416. A Treasury Officer may issue a Draft in exchange for one drawn on him only if the holder has been removed to the neighbourhood of another treasury or of an office or agency of the Bank.
NOTE— A Draft is said to be exchanged when the holder being unable to appear and take payment in cash, applies for a new one endorsing the original “Received payment by Draft on …………….”.
If he can appear and take payment in cash, his obtaining a new Draft
with the cash paid on the old one is a matter to be disposed of under
417. When a Draft is exchanged for another, the original Draft will be treated and entered as a Draft presented for encashment and the amount again credited as received for the issue of a new Draft.
418. Unpaid Drafts.—Drafts which are outstanding for more than six months can be paid only after obtaining the necessary confirmation from the drawing office.