The recovery relating to each individual loan included in the following classes of loans is watched and accounted by A.G (A&E).

I – Loans and Advances to Public and Quasi-Public Bodies

II – Loans and Advances to Government employees

I) Loans and Advances to Public and Quasi-Public Bodies

(a) Public and Quasi-Public institutions to which loans and advances are  sanctioned by Government.

• Loans to Port Trust and other Port Funds, Water Authority.
• Loans to Municipal Corporations and Municipalities
• Loans to Statutory Corporations and Boards.
• Loans to District and other Local Funds Committees.
• Loans to Panchayati Raj Institutions.
• Loans to Local Bodies to cover revenue deficit.

(b) Other Loans and Advances

Detailed accounts of loan transactions under the major heads of account 6075 to 7475 and 7615 except those mentioned under C- Procedure (k) below are maintained by the Departmental Officers.

The responsibility of accounting of loan disbursements, raising of demands, accounting of recovery of   loans and interests etc, vests with the Departmental Officers.

II) Loans & Advances to Government employees

The Advances to Government employees the accounts of which are maintained by AG (A&E) are as follows:-

(a) Interest bearing advances that are recovered over a long period -

• House Building Advance – recoverable in 216  monthly  instalments including interest;
• Motor Car Advance- recoverable in 144 instalments including interest.
• Motorcycle Advance-recoverable in 96 instalments including interest.
• Personal Computer Advance and
• Interest bearing advances recoverable in not more than 60 instalments (e.g. Cycle Advance, Fan Advance, Mosquito Net Advance, Warm Clothing Advance).

(b) Interest free Loan for medical expenses

Governments have discontinued loans for House Building Advance, Motor Conveyance Advance and Personal Computer Advances to its employees in 2002.  House Building Advance was restored to the employees by Government from 2010 onwards.  Now as part of the economy measures, Government have again decided to discontinue the HBA scheme to Government employees and teachers and have introduced a new House Construction Advance Scheme for State Government Employees in association with Banks with effect from April 2019.

With effect from 01.04.1974, the responsibility of Accountant General has been limited to the maintenance of detailed accounts in respect of long term advances to non-Gazetted Officers mentioned in (a) above and of all categories of advances mentioned above to Gazetted Officers.  Detailed accounts in respect of category (a(5)) above to Non-Gazetted Officers are to be maintained by the Departmental Officers who are responsible for disbursement and recovery of these advances.

The Heads of Departments as the Chief Controlling Officers will be responsible for the reconciliation of the accounts.  They should obtain the monthly statements of all disbursements and recoveries in all cases falling under category (a(5)) above from the various Drawing and Disbursing Officers and reconcile periodically with the transactions accounted for in the books of Accountant General.

House Building Advance

The conditions for the grant of House Building Advance to the officers of the State are prescribed in Art.244 of KFC, Vol. 1. The rules to regulate the grant of advances to Central Government servants for building of houses etc.  have been issued by the Ministry of Works,  Housing and Rehabilitation in a printed booklet.

Utilisation Certificate

Article 244  C (xxi) of Kerala Financial Code (KFC) Vol.I provides that the advance sanctioned should be utilized for the purpose for which it is sanctioned within a reasonable time, not exceeding one year from the date of disbursement of the amount.  As contemplated in Article 244 E (vi) of KFC Vol I it will be duty of the head of the Department/Sanctioning Authority to watch the utilisation of the advance and to forward the Utilization Certificate (UC) furnished by the loanee to the Accountant General for verification.  If the UC is not furnished, penal interest at 2.5% will be levied vide Article 244 D (2) of KFC Vol.I.  Further, any amount not utilized should be refunded to Government with interest in lump. When non receipt of UCs in AG’s office is reported, some of the loanees inform that they had already submitted the UC to the Head of the Department/Sanctioning Authority.  In order to avoid hardship to the loanee, the Sanctioning Authority / Head of the Department must ensure that the utilization certificates in respect of the HBA availed by the loanees are forwarded to AG without fail.

Penal interest at 2.5% will be levied vide article 244D (2) of KFC Vol.1. The rate of penal   interest is amended as 18 % against the existing rate of 2.5% vide G.O (Ms) No. 53/2019/Fin/dated 03.05.2019.

Missing Credit

The missing credits/debits relating to HBA or MCA are to be adjusted on the basis of documentary/collateral evidence such as pay bills/paid vouchers, acquittance rolls, Audit Registers, certificates of deductions, payments from disbursing officers, after obtaining the approval of the Branch Officers up to Rs.2000 in each case and of the Group Officers if the amount exceeds Rs.2000.The amount of debit/credit supplied in the account of the loanee has to be adjusted in the accounts under the head 'House Building Advance Suspense'/'Motor Conveyance Advance Suspense', opened as per Note(2) below the minor head 'Suspense Accounts(Civil)' under the Major Head '8658-SuspenseAccounts'  - videC.S.N0.265dated5.4.1982toLMMH.

Missing credits of long term loans of State Government Officers on deputation to autonomous bodies/Public Sector Undertakings can be adjusted on collateral evidence based on the details of remittance of recoveries into Government .Account, furnished by the Drawing & Disbursing Officers of the Autonomous Bodies/Public' Undertakings, provided it is established that the lumpsum amount consisting of recoveries  from several persons remitted through a single chalan has been credited to the State Govt. Accounts concerned.

Cases of Govt. employees who die in harness By the issue of GO(P)No.591/97dated17/06/1997 Government introduced a scheme for Write Off/Waiver upto Rs..2 lakhs of outstanding liabilities of loans and advances granted to the employees dying-in-harness. The monetary limit on the outstanding liability on the loans and advances granted to employees who expire while in service have been enhanced to Rs.5 lakhs vide G.O (P) No.91/17/Fin. Dated 17.07.2017.