Indian Railways

The matter has been examined and it has been decided to extend the scheme further beyond 30.06.2005 until further advice subject to the following conditions:

1.	Zonal Railways will carry out annual review of the scheme on case-to-case basis and the extension will be granted with the concurrence of FA& CAOs.
2.	The amount of Bank Guarantee will be equivalent to the freight for 7 days transactions based on the peak month's figure during the previous 12 months.
3.	The Bank Guarantee shall be valid for the period of the Agreement as also for a period of 6 months beyond the date of expiry of the agreement .
4.	The facility will be extended to such rail customers who either have an account in the same branch of the same bank where Railway's Deposit Account is available or even to such customers who have an account in the same city in the branch of another scheduled Public Sector Bank. Such bank accounts should always be in the city where the transactions originate so as to ensure that there is no delay in depositing the freight and its realisation by the bank.
5.	The credit limit available to such rail customers would be equivalent to 15 days freight transactions
6.	The cheques for payment of freight should be realised from the concerned customers on the day of transaction itself and in any case on the next working day.
7.	The cheques should be deposited in the Railway's local bank on the date of receipt itself or on the next day. If the next day happens to be a closed day or Bank holiday the deposit shall be made on the first working day of opening of the Bank.
8.	The rail customers, as well as the concerned Chief Goods Supervisors of the Railways shall monitor and ensure that the cheques have not only been deposited in the Railway's local bank but also that the bank account of the customers has been debited and Railway's bank account credited by the next working day. If the Railway's bank account is not credited within 7 days, including holidays due to any default on the part of customers, such rail customers will be liable to pay the penalty, equivalent to the surcharge applicable on the 'To pay' transactions.
9.	A manuscript register shall be maintained at each railway station/goods shed to record the date of transaction; date of receipt of CNCC; date of deposit of the cheques in Railway's deposit account and date of clearance (credit to Railway's bank account) etc. so as to keep a watch over efficacy of the CNCC system as also to ensure that the stipulated credit limit available to the rail customers is not being exceeded.
10.	The payment of freight through CNCC facility will be extended to only those rail customers who enter into an agreement with the Railways for this purpose.

It is reiterated that the liberalised facility of reduced Bank Guarantee equivalent to 7 days freight transactions of the peak month be extended only to those parties where past experience reveals that the Railway's bank account is always credited with in 7 days of the issue of the Railway Receipt. In case of new customers, the amount of Bank Guarantee may be decided in consultation with their associate finance on the basis of traffic offered/expected. This can later be revised based on actual traffic. It should also be ensured that an effective and alert monitoring mechanism is available to ensure credit to Railway's account in time and proper functioning of the system.

Railways may satisfy themselves that the facility is extended to only reputed, credit-worthy and financially sound and economically viable organisations with a high turnover. In addition to above, in case of new customers this facility should be extended only to those parties who are willing to offer substantial traffic.

This issues with the concurrence of the Accounts & Finance Directorates in the Ministry of Railways.