1. BANKING OPERATIONS
DAY-2 SESSION -2
GOVERNMENT PAYMENTS PROCESSES
1

2. MODES OF GOVERNMENT PAYMENTS
1.Cash Payments
2.Through Clearing
3.Transfer
2

3. MODES OF GOVERNMENT PAYMENTS
The following are the main modes of Government Payments:
3
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.

4. 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
4

5. 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 schedule.
 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.
5

6. 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 year
While 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
6

7. 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 7

8. SCHEDULE & ITS MARKING
Scrutiny of
schedules
Filling schedule date
wise
Marking on payment
as well as on
stoppage
8

9. 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 9

10. 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
10

11. 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
11

12. 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. 12

13. 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. 13

14. CASH CHEQUE
 CASH PAYMENT CHEQUE SAMPLE
14

15. 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
15

16. 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 16

17. 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.
17

18. CLEARING CHEQUE
 CLEARING CHEQUE SAMPLE
18

19. 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 19

20. PAYMENTS THROUGH TRANSFER
 Payments Through TRANSFER
 Transfer Cheque sample
20

21. 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. 21

22. OBJECTION MEMO
22

23. 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.
23

24. 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
24

25. REVERSAL OF ENTRIES IN SYSTEM
 Reversal before EOD
 Adjustment after EOD
 Zero level authorization
25

26. 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
26

27. 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
27

28. REFUND OF INCOME TAX VOUCHER
 Validity
 Segregation of Income Tax Voucher up to
Rs.10,000/ & above Rs.10,000/
 Separate refund book
 Countersignature
28

29. PAYMENTS TO RAILWAY
1. Current account III
2. 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.
29

30. 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
30

31. DAILY REPORTS OF PAYMENT
Sr. NO GOVERNMENT PAYMENT
REPORTS
1 Scroll
2 Abstract
3 Treasury Sheet
4 Government Balance reporting to
HOK
31

32. 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 Accounts32

33. 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.
33

34. 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/-
34