Payment Methods for Railway Dues

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Questions and Answers

Under what circumstances can public traffic railway dues be paid, other than cash?

  • When the customer is a foreign tourist.
  • When the customer is a government entity.
  • When authorized by Railway Administrations for freight payments via cheques, bank drafts, or credit notes. (correct)
  • When the amount due is less than 500 Rupees.

Which of the following is accepted towards payment of passenger fares and luggage charges at important stations?

  • Foreign currency.
  • Personal checks.
  • Postal orders.
  • Rupee Traveller cheques issued by the State Bank of India. (correct)

What is the minimum amount for which Station Masters are empowered to accept Bank Drafts/Bank pay orders for payment of freight and other railway dues?

  • 500 Rupees.
  • 5,000 Rupees.
  • 10,000 Rupees.
  • 1,000 Rupees. (correct)

What is the criteria for parties to be granted the facility of payment of railway dues by Credit Notes?

<p>They must be well-known parties of good standing with regular monthly transactions with the railway. (B)</p> Signup and view all the answers

If a firm opts to provide security in cash for the "Weight only" system, for how many days of average freight should the security amount represent?

<p>20 days based on the peak month's figure during the previous 12 months. (D)</p> Signup and view all the answers

How is the security amount determined for payment of freight by Credit Notes?

<p>Based on the average freight of the firm for a period of 30 days based on the average of previous 12 months. (D)</p> Signup and view all the answers

If the security is not paid in cash for 'Weight only' system, how is the amount calculated?

<p>Transactions for one month based on the peak month's figure. (C)</p> Signup and view all the answers

According to the procedure for issuing checks, which of the following is NOT a requirement for a check?

<p>Checks can be accepted for passenger fares if the amount is over $10. (C)</p> Signup and view all the answers

What is the procedure if a department does not have a cheque writing machine?

<p>Cheques should be written legibly by hand with dark ink and include an overage amount written at right angles. (B)</p> Signup and view all the answers

What action must departments take to allow payment of freight charges by check?

<p>The department must furnish the names, designations, and specimen signatures of authorized officers to the General Manager. (D)</p> Signup and view all the answers

According to the guidelines, what should a department do when there are changes in the officers authorized to issue cheques?

<p>Notify the General Manager with specimen signatures, who will then inform the stations concerned and the Cash Office. (C)</p> Signup and view all the answers

What is the stipulated minimum amount for which a cheque can be issued?

<p>Rs 10 (A)</p> Signup and view all the answers

What is a crucial criterion for a party, whether in the public or private sector, to be eligible for the 'weight only' freight payment facility?

<p>The party should demonstrate creditworthiness and not be a habitual defaulter in the payment of railway dues. (D)</p> Signup and view all the answers

What certification must the Senior DCM/DCM provide before granting the 'weight only' freight payment facility?

<p>A certificate confirming that the party is not a habitual defaulter in payment of railway dues. (A)</p> Signup and view all the answers

How is the traffic of a party treated if they provide a cash security deposit for the 'weight only' system?

<p>The traffic is treated as paid and is not subjected to the surcharge leviable on 'To Pay' traffic. (B)</p> Signup and view all the answers

What happens if a party does NOT provide a cash security deposit for the 'weight only' system?

<p>The traffic will be treated as 'To Pay' and the party has to pay the surcharge. (B)</p> Signup and view all the answers

How often should the security deposit amount, whether in cash or bank guarantee, be reviewed for the 'weight only' system?

<p>Periodically, to ensure adequacy, and steps should be taken to enhance it if necessary. (B)</p> Signup and view all the answers

Who should the Zonal Railways consult with when laying down a detailed procedure of booking traffic under the 'weight only' system?

<p>Their F.A.&amp; C.A.Os (Financial Advisor &amp; Chief Accounts Officers). (D)</p> Signup and view all the answers

What is crucial system to be implemented for the collection of accounts foils of 'weight only' invoices?

<p>A regular system of collection by couriers to ensure timely billing. (D)</p> Signup and view all the answers

How often should bills typically be prepared and submitted to the party or their banker for prompt payment under the 'weight only' system?

<p>Every 5 day period. (D)</p> Signup and view all the answers

For loco coal or military authority transactions where only book adjustments are made, how often is billing typically done?

<p>Every 10 day period. (B)</p> Signup and view all the answers

What action should be taken if a party defaults on a 'weight only' bill payment or a cheque is dishonored?

<p>View the default seriously and consider discontinuing the facility. (A)</p> Signup and view all the answers

Where should cheques issued for 'weight only' bill payments be drawn?

<p>A branch of the bank situated at the headquarter of the Zonal Railway. (D)</p> Signup and view all the answers

What additional financial instrument is required from parties exempt from 'To Pay' traffic surcharge due to a security deposit?

<p>A 'Letter of Credit' with a bank in the metropolis where the Railway's Traffic Accounts Office is situated. (C)</p> Signup and view all the answers

If the Railway Deposit account is not operated in the same branch of the bank as the 'Letter of Credit', what is required?

<p>The party's bank should issue a Demand Draft in favor of the Railways encashable where the Railways' cash office is situated. (C)</p> Signup and view all the answers

What happens if a bill is not paid within the stipulated period of 10 days for parties using 'Letter of Credit'?

<p>A surcharge will become leviable. (D)</p> Signup and view all the answers

What action should be taken if a party's Credit Note is dishonored or dues are not paid?

<p>Withdraw the Credit Note payment facility unless adequate reasons exist not to. (A)</p> Signup and view all the answers

What is the purpose of the agreement executed between a party and the Zonal Railway Administration for the 'weight only' system?

<p>To formally establish the terms and conditions under which the 'weight only' payment facility is extended. (C)</p> Signup and view all the answers

When freight payment is made via Credit Note at the time of booking, how is the traffic classified?

<p>Paid traffic. (B)</p> Signup and view all the answers

When using MICR technology, what information should be recorded on the reverse of the cheque issued alongside the Credit Note?

<p>Credit Note number, booking station name, and other relevant particulars. (A)</p> Signup and view all the answers

Who should the Zonal Railways consult with when varying the specimen agreement for the 'weight only' system?

<p>Their FA.&amp; C.A.Os (Financial Advisor &amp; Chief Accounts Officers). (C)</p> Signup and view all the answers

Regarding 'Weight only' bills adjustments required for over-charges should be carried out in?

<p>The bills for the subsequent period/periods. (A)</p> Signup and view all the answers

What details pertaining to the cheque should be recorded on the Credit Note when using MICR cheques?

<p>Cheque number, date, bank name, and amount. (C)</p> Signup and view all the answers

On which type of bank should the Credit Notes/MICR cheques be drawn?

<p>A scheduled bank where the Railways' cash office is located. (D)</p> Signup and view all the answers

For 'Weight only' bills, when is the amount paid adjusted?

<p>Next month in the final bill for the actual freight charges due. (B)</p> Signup and view all the answers

How are 'Weight only' bills payable?

<p>Payable in full by the parties. (D)</p> Signup and view all the answers

If the Credit Notes/MICR cheques are unavoidably drawn on a branch outside the station where the Railways' cash office is located, what additional charge should be included?

<p>Commission charges payable for encashing such Credit Notes/MICR cheques. (A)</p> Signup and view all the answers

Before implementing the Credit Note payment facility, what formal step should the Railway Administration undertake with the concerned party?

<p>Enter into an agreement outlining the terms and conditions, in consultation with the Law Officer and the Associate Finance. (D)</p> Signup and view all the answers

Which department's payment instructions are detailed in the I.R.C.A. Military Tariff?

<p>Defence Department (D)</p> Signup and view all the answers

Besides the 'weight only' system, what other procedure requires periodic review to ensure the adequacy of the security deposit?

<p>Credit Note-cum-Cheque payments. (B)</p> Signup and view all the answers

What is the primary purpose of the agreement between the Railway Administration and the party concerning the Credit Note facility?

<p>To incorporate the terms and conditions for affording the Credit Note facility. (C)</p> Signup and view all the answers

Which statement correctly describes how cheques should be filled out?

<p>Cheques must be written legibly with bright ink and include a sum slightly in excess of the amount. (A)</p> Signup and view all the answers

What is the required crossing on issued cheques?

<p>Account Payee only—Not negotiable. (B)</p> Signup and view all the answers

Which of the following is a restriction concerning cheque acceptance?

<p>Cheques must be over Rs 10 to be accepted. (A)</p> Signup and view all the answers

What is the procedure if a department lacks cheque writing machines?

<p>Cheques must be written manually in legible hand using bright ink. (A)</p> Signup and view all the answers

What must accompany cheques issued by departments authorized to issue them?

<p>Stamp of the issuing office and signature of the authorized officer. (A)</p> Signup and view all the answers

What is the primary form of payment required for railway dues on public traffic?

<p>Cash only (B)</p> Signup and view all the answers

What system involves paying freight based on transactions from a peak month?

<p>Weight only system (A)</p> Signup and view all the answers

What amount should the security for payment by Credit Notes represent?

<p>Average freight for 30 days based on the last year (A)</p> Signup and view all the answers

What is the minimum amount for which payments can be made by Bank Drafts or Bank pay orders?

<p>1,000 Rupees (A)</p> Signup and view all the answers

Which of the following is a condition for accepting Credit Notes as a payment method?

<p>The party must have regular monthly transactions. (C)</p> Signup and view all the answers

If security is not paid in cash under the 'Weight only' system, how is the amount determined?

<p>Calculated as the peak month's figure for one month (D)</p> Signup and view all the answers

Which types of cheques can be accepted for paying railway dues at important stations?

<p>Rupee Traveller cheques only (A)</p> Signup and view all the answers

What is one of the acceptable forms of security for individuals authorized to make railway payments?

<p>A deposit of cash (B)</p> Signup and view all the answers

Which type of securities must be deposited below the market value to be accepted for railway dues?

<p>Government securities (C)</p> Signup and view all the answers

Guarantee bonds can be executed by which of the following banks to meet the railway dues requirement?

<p>Approved Scheduled Banks (B)</p> Signup and view all the answers

Which of the following is NOT an accepted form of security for railway dues?

<p>Deposit receipts of private banks (A)</p> Signup and view all the answers

What is a feature of the 'Weight only' system for booking freight?

<p>Freight is calculated in the Accounts Office (A)</p> Signup and view all the answers

Which authority has the power to approve private firms for payment of freight charges using Credit Notes?

<p>Heads of Department (C)</p> Signup and view all the answers

What is required from a non-approved Scheduled Bank to use a Guarantee Bond for railway dues?

<p>Counter-signature from an approved Scheduled Bank (A)</p> Signup and view all the answers

Which specific commodities are designated for the 'Weight only' payment system?

<p>Coal, mineral oils, and cement (D)</p> Signup and view all the answers

In which situation can a party use a deposit in the Post Office Savings Bank as security for railway dues?

<p>As part of the security options listed (B)</p> Signup and view all the answers

What is the consequence of not having any outstanding freight and siding charges at the time the 'weight only' facility is granted?

<p>The party will be considered creditworthy. (B)</p> Signup and view all the answers

How frequently should traffic be billed for parties using the 'weight only' system?

<p>Every 5 days for regular transactions. (A)</p> Signup and view all the answers

What should be done if a party's traffic is treated as 'To pay' due to lack of cash deposit?

<p>The party must pay applicable surcharges. (D)</p> Signup and view all the answers

What is required from parties wishing to obtain the 'weight only' payment facility?

<p>A history of regular payments with no defaults. (B)</p> Signup and view all the answers

What alternative method can be used for providing security besides cash for 'weight only' transactions?

<p>A bank guarantee. (A)</p> Signup and view all the answers

According to the guidelines, when should the amount of security deposit be reviewed?

<p>Periodically, to assure its adequacy. (D)</p> Signup and view all the answers

For which type of transaction can billing be done every 10 days instead of every 5 days?

<p>Military authority traffic. (B)</p> Signup and view all the answers

What should Zonal Railways do when establishing procedures for 'weight only' system traffic?

<p>Involve their Finance and Accounts officials. (A)</p> Signup and view all the answers

Which document must be prepared for a regular system of collection of 'weight only' invoices?

<p>Accounts foils of invoices collected by couriers. (A)</p> Signup and view all the answers

Why is a provisional bill issued for the month of March under the 'weight only' system?

<p>To average past transactions for accurate billing. (C)</p> Signup and view all the answers

What action should be considered if there is a default in payment or a dishonored cheque for a 'weight only' bill?

<p>View it seriously and consider discontinuing the facility (B)</p> Signup and view all the answers

Where must cheques for 'weight only' bills be drawn to be accepted?

<p>On a branch at the headquarter of the Zonal Railway (C)</p> Signup and view all the answers

What is required from a party that wishes to enjoy exemption from the surcharge on 'To Pay' traffic?

<p>A Letter of Credit with a bank (A)</p> Signup and view all the answers

What should be done if a Bankers' Demand Draft is required for a party not operating a Railway Deposit Account in the same bank branch?

<p>The bank should issue a Demand Draft payable at the Railway cash office (C)</p> Signup and view all the answers

What happens if a bill is not paid within the stipulated period of 10 days for parties utilizing a Letter of Credit?

<p>A surcharge will become leviable (D)</p> Signup and view all the answers

What must be executed by every party utilizing the 'weight only' payment facility?

<p>An agreement with the Zonal Railway Administration (C)</p> Signup and view all the answers

In what scenario would adjustments for 'over-charges' occur according to the guidelines?

<p>In the bills for subsequent periods (A)</p> Signup and view all the answers

What is the primary consideration for a party when presenting a cheque for 'weight only' bill payments?

<p>The cheque must not be accepted if from a different bank (D)</p> Signup and view all the answers

What must the bankers do upon the presentation of the bills drawn on Letters of Credit?

<p>Ensure immediate payment of the bills (A)</p> Signup and view all the answers

When a party's cheque for a 'weight only' bill is dishonored, what immediate step must be taken?

<p>Consider discontinuing the payment facility (C)</p> Signup and view all the answers

Flashcards

Payment of railway dues

Railway dues must be paid in cash, except in special cases.

Acceptable payment methods

Payments can be made via cheques, drafts, or E-payments under certain conditions.

Credit Notes usage

Credit Notes allow payment for frequent and reliable customers, requiring security deposit.

Weight only system

This system permits payment based on weight, also for established customers.

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Security deposit for Credit Notes

Security is the average freight for 30 days calculated from the last year.

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Security for Weight system

Security amount varies: 20 days for cash, 1 month for non-cash security.

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Rupee Traveller cheques

Traveller cheques from State Bank of India accepted at key railway stations.

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Creditworthy Party

A party eligible for facility extension based on payment history.

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Habitual Defaulter

A party that frequently fails to pay dues on time.

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Security Deposit

Money or guarantee given to ensure payment obligations.

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Surcharge on 'To Pay' Traffic

Additional charge imposed when depositing isn't made in advance.

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Periodic Security Review

Regular checks to ensure security deposits are adequate.

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Invoice Submission

The process of sending bills regularly for prompt payment.

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Five Day Billing Cycle

Invoices are created every five days for payment collection.

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March Provisional Bill

Temporary billing based on average transactions from prior months.

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Periodical review of security deposits

Regular checks on the adequacy of security deposits are required for parties using Credit Note payments.

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Monitoring Credit Note payments

Close oversight of payments against Credit Notes is essential; non-payments should lead to withdrawal of the facility.

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Paid traffic definition

Traffic booked and paid for at the time is recognized as paid traffic in railway terms.

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MICR technology and payments

Parties must issue a formal MICR cheque with the Credit Note for payments when this technology is used.

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Recording details on cheques

Relevant details like Credit Note number and booking station must be noted on the cheque's reverse.

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Credit Notes on scheduled banks

Credit Notes must be drawn on scheduled banks, specifically at the branch where the railway cash office is located.

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Commission for non-local Credit Notes

If Credit Notes are cashed at non-local branches, include commission charges in the total amount.

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Agreement terms for Credit Note facility

Railway Administration must draft an agreement detailing Credit Note terms with involved parties before providing the facility.

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Defence Department payment methods

The Defence Department has specific instructions and forms for paying railway dues, including Military Credit Notes and Warrants.

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Cheque issuer

Cheques must be drawn in favor of the Chief Cashier or nominated officer.

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Linking details on payments

Parties must record specific cheque details on the Credit Note to ensure transaction clarity and traceability.

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Printing cheques

Cheques must be issued on printed forms with a special crossing: 'Account Payee only—Not negotiable'.

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Cheque writing rules

Cheques should be written with machines or by hand in bright ink, with sums written in words.

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No erasures policy

Cheques must not have erasures or overwritings, and abbreviations are not allowed.

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Transaction requirements

A separate cheque is required for each transaction; payments under Rs 10 must be cash.

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Weight only bill payment

Full payment required for 'weight only' freight bills, with future adjustments for overcharges.

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Adjustment of freight charges

Future billing adjusts for actual freight charges paid previously under 'weight only'.

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Monitoring payment realization

Track and ensure payments for 'weight only' bills are received; defaults may lead to service discontinuation.

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Cheque acceptance conditions

Cheques must be drawn on specific bank branches; no out-station cheques accepted for 'weight only'.

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Security deposit exemption

Cash security deposit allows exemption from surcharge on 'To Pay' traffic; requires a Letter of Credit.

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Letter of Credit requirement

Parties must operate a Letter of Credit with a bank near the Railway's Traffic Accounts Office.

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Demand Draft necessity

If no railway account exists, a Demand Draft is required, payable at the Railway cash office.

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Surcharge default penalty

A surcharge applies if bills aren't paid within 10 days as stipulated.

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Agreement execution for payments

All parties must sign an agreement to use the 'weight only' payment system with Zonal Railway.

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Zonal Railway Administration role

The Zonal Railway Administration varies agreements as needed for 'weight only' payments in consultation with financial officers.

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Security for Credit Notes

Deposit required based on average freight from the last year for Credit Notes usage.

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Payment by Cheques

Cheques accepted under special circumstances for railway dues.

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Eligibility for Credit Note

Only well-known parties with good standing can use Credit Notes with security.

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Payment methods for Defence Department

Military Credit Notes and specific forms are required for Defence Department payments.

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Cheque drawing rules

Cheques must be drawn in favor of the Chief Cashier and follow specific writing formats.

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Forms of Security Deposit

Security deposits can be cash, government securities, or bank guarantees.

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Government Securities for Security

Government securities can be deposited at 5% below market value as security.

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State Bank Guarantee Bonds

Guarantee bonds executed by State Bank of India can serve as security.

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Approved Scheduled Bank Bonds

Bonds from approved banks can provide security through lodged securities.

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Credit Note Payment Rules

Credit Notes for firms must follow specific formats in the manual.

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Weight Only System Purpose

The 'Weight only' system bases freight charges on actual weight.

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Freight Payment Commodities

'Weight only' system applies to selected goods like coal and cement.

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Post Office Savings Bank Deposit

Deposits for security can also be made in the Post Office Savings Bank.

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Indian Railway Finance Bonds

Bonds issued by the Indian Railway Finance Corporation can also secure payments.

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Creditworthy Requirement

Parties must be creditworthy and not habitual defaulters to receive facilities.

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Certification by Senior DCM

The Senior DCM must certify that the party is not a habitual defaulter before granting facilities.

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Outstanding Charges Condition

No outstanding freight or siding charges on the day the facility is granted.

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Cash Security Deposit

Cash deposits for the 'weight only' system treat traffic as paid, avoiding surcharges.

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'To Pay' Traffic Definition

Traffic without prior cash deposits is treated as 'To Pay', incurring surcharges.

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Billing Procedure Development

Zonal Railways must create detailed procedures for 'weight only' traffic billing.

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Account Foils Collection System

Establish a system to collect account foils for 'weight only' invoices timely.

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Five and Ten Day Billing Cycle

Bills to be prepared every 5 days for normal traffic, 10 for loco coal or military adjustments.

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March Billing Adjustments

Provisional bills for March based on averages of the previous three months.

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Cheque Format

Cheques must use printed forms and include 'Account Payee only—Not negotiable'.

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Legibility Requirement

Cheques should be written clearly, preferably using a cheque writing machine or bright ink by hand.

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Erasures and Overwritings Policy

Cheques must not have erasures, over writings or abbreviations to ensure validity.

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Cheque Issuance for Small Amounts

No cheques accepted below Rs 10; must be paid in cash instead.

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Adjustments for Overcharges

Adjustments for overcharges are made in subsequent billing cycles following actual freight charges.

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'Weight Only' Bill Definition

A 'weight only' bill requires full payment upfront, with potential adjustments later for overcharges.

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Cheque Acceptance Rules

Cheques for 'weight only' bills must be from specific bank branches; out-station cheques are not accepted.

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Security Deposit for Exemption

A cash security deposit allows for exemption from surcharges on 'To Pay' traffic, with a Letter of Credit requirement.

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Letter of Credit Operation

Parties must maintain a Letter of Credit with a bank in the city's vicinity where railway accounts are managed.

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Demand Draft Requirement

If an account isn't maintained at the railway's bank, a Demand Draft must be issued for payments.

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Surcharge for Late Payments

A surcharge applies if 'weight only' bills are not settled within the stipulated period of 10 days.

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Agreement for 'Weight Only' System

All parties availing the 'weight only' payment system must sign an agreement with Zonal Railway Administration.

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Variation of Agreements

Zonal Railway Administration can vary agreements regarding the 'weight only' payment system as needed.

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Study Notes

Payment Methods for Railway Dues

  • Railway dues can be paid in cash, except in specific cases where payment by cheque, bank draft, credit note, e-payment, or the "weight only" system is allowed.
  • Rupee Traveller's cheques from nationalized banks and State Bank of India are accepted for passenger fares and luggage.
  • Station Masters can authorize bank drafts or pay orders (over ₹1000) from nationalized/scheduled banks for freight and railway dues.

Security for Credit Note/Weight Only Payment

  • Railway administrations can allow credit note or "weight only" payment at their discretion, for only trusted parties with regular and adequate monthly transactions.
  • Security amount depends on the average freight transaction over 12 months, or 20 days for peak months.
  • Security can be cash, government securities (below market value), State Bank deposit receipts, guarantee bonds, demand drafts, or Post Office Savings Bank deposit.
  • Security amount depends on the value of average freight transactions.

Credit Notes for Private Firms/Individuals

  • The format of credit notes for private firms/individuals is prescribed in the Indian Railways Commercial Manual.
  • Weight and rate are listed on invoices, with calculation in accounts office.
  • Only specified goods (coal, minerals, bamboo, iron ore, manganese ore, limestone, dolomite, gypsum, and cement) are part of the "weight only" system.

More on Credit Notes ('Weight Only' System)

  • Payment is only for specific commodities.
  • The party must be creditworthy and not a habitual defaulter for this system.
  • Cash security payments exempt traffic from surcharges.
  • Security amount is regularly reviewed, potentially increased, depending on the adequacy and transactions
  • Zonal Railways must provide specific procedures for booking and accounting, including collection of invoices by couriers, billing every 5 or 10 days, and monthly bills.

Payment by Government Departments

  • Defence personnel use specific forms (Military Credit Notes).
  • Central and State Civil Departments use Civil Credit Notes for railway dues payments.
  • Post and Telegraph use specific credit note forms.
  • Scheduled banks are required for cheque payments.

Payment by Cheque (for Govt. Departments)

  • Cheques can be used for payments if departments meet conditions and procedures, including responsibility for security, undercharges, commission, and dishonoring of cheques.
  • Departments are responsible for cheque security and payment of related commissions/undercharges/dishonouring.
  • Cheques should be drawn for at least ₹10.
  • Cheques must be drawn on a scheduled bank located at the railway headquarter, not outstations.
  • Special forms and crossing details ("Account Payee only-Not negotiable") must be applied to cheques, and cheques should be written with a machine, or legibly, with bright ink, and without any erasures or overwrittings.
  • The officer's full designation should be shown on every cheque.
  • A separate cheque should be issued for each transaction.
  • No cheque should be accepted for less than ₹10 in payment.

Procedures at Railway Stations

  • Cheque processing, recording, and undercharge handling are detailed step-by-step procedures.
  • Acceptance requires checking issued officer, signature authenticity, and format adherence. A register of cheques accepted should be in place.
  • If a cheque is dishonoured, a replacement cheque must be issued immediately.

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