CHAPTER 8
REMITTANCES BETWEEN MINISTRY OF EXTERNAL AFFAIRS AND MISSIONS

8.1     The head 8658 Suspense Accounts 130-Reinittances between Ministry of External Affairs and Missions is to be operated only by the Chief Controller of Accounts, Ministry of External Affairs who is responsible for arranging cash remittances in foreign currency to all the Indian Missions abroad except those at London and at Washington.

8.2.1     The Ministry of External Affairs issues sanctions authorising the Reserve Bank of India, New Delhi to make available a specified amount in a particular foreign currency to designated Mission on the first of each month. Such sanctions are normally issued covering a period of 3 to 6 months. The Ministry forwards the original copy of the sanction to Public Accounts Department, R.B.I., New Delhi and endorses two copies to the Chief Controller of Accounts, Ministry of External Affairs. A specimen of the sanction issued is at Annexure 'A'. The Chief Controller of Accounts maintains a Mission-wise register in which the number and date of the letter from the Ministry, the amount to be remitted in foreign currency and the due dates are noted. The RBI New Delhi issues instructions to its agent i.e. the Bank functioning at the place of the Mission abroad and transacting business on its behalf to arrange for the payments specified in the letter to the Mission concerned on the date (s) specified in the letter. The concerned branch of the Bank makes the payment to the Mission and raises debit against the RBI telegraphically. The RBI, New Delhi which is the accredited bank for the Chief Controller of Accounts, Ministry of External Affairs debits his account in the payment scroll quoting reference to Ministry of External Affairs letter number and date under which such remittance has been authorised. The payment scroll also contains cable charges (in Indian Rupees) incurred by the bank for arranging such a remittance. The bank scroll also gives the equivalent in Indian Rupees of the foreign remittance converted at the commercial rate prevalent on the date of remittance.

8.2.2     On receipt of the payment scroll, entries of payments in foreign currency, its equivalent in Indian Rupees at commercial rate on the date of payment to the Mission and the cable charges in Indian currency are noted in the said Register against the original sanction. The total amount in Indian currency is calculated. On receipt of monthly statement (CAS 122) from RBI, CAS, Nagpur the accounting entry for the payment is made as under:-

Dr. 8658—Suspense Accounts
        130—Remittances between Ministry of External Affairs and Missions

Cr. 8675—Deposits with Reserve Bank 
        101—Central Civil

8.3.1     The Missions render their monthly Cash Account duly supported by vouchers to the Chief Controller of Accounts, Ministry of External Affairs in which the receipt of remittance as above is entered on the specified date of the month concerned. The Mission's account is rendered in the relevant foreign currency and the rupee equivalent thereof converted at official rate of exchange.

8.3.2     On receipt of the monthly cash account as above, the receipt of remittance as indicated by the Mission in the foreign currency is tallied with the amount of remittance authorised by the Ministry of External Affairs as contained in their sanction. Once the foreign currency amount tallies, the Indian currency equivalent at official rate of exchange as intimated by the Mission is accepted as correct.

8.4.1     The actual remittance as debited by the RBI in Indian rupees in the payment scroll at commercial rate of exchange and the amount in rupees (at official rate of exchange) reflected in the monthly Cash Account are compared. The difference between the two is treated as loss or gain on exchange. The accounting entries are:

Dr. 2061—External Affairs
        101 Embassies and Missions 
        Office Expenses (for accountal of cable charges)

(—) Dr. 8658—Suspense Accounts
        130—Remittances between Ministry of External Affairs and Missions 
        (for an amount equal to the payment scroll of RBI at commercial rate of exchange)+ Cable charges.

Dr. 8671—Departmental Balances
        101 Civil——————(Name of Mission/Embassy) 
        (for rupee equivalent shown in monthly Cash Account at official rate of exchange).

Dr. 2075—Misc. General Services 
        791—Loss by Exchange
        (in case the rupee equivalent in Mission's cash account is less than the 
        rupee equivalent in the payment scroll of RBI)

Or 

Cr. 0075—Misc. General Services
        791 Gain by Exchange
        (in case the rupee equivalent in Mission's Cash Account is more than 
        the rupee equivalent in the payment scroll of RBI).

in both the cases, normally the entire amount booked as debit under the minor head - Remittances between the Ministry of External Affairs and Missions, at the time of making the payments is fully squared up and nullified on receipt of the monthly Cash Account from the Mission concerned.

8.4.2     However, there is usually a time lag of two to three months from the date the intimation is received from the RBI regarding remittances arranged and the month in which the remittance is accounted for in the Monthly Cash Account of the Mission. Thus, the debit under this suspense head gets cleared only over a period of two to three months. Care has however, to be taken to ensure that all remittances arranged till 31st March of a financial year are definitely cleared in March (Supplementary) accounts of that year itself.

8.4.3     There may be occasions when some balance under this minor head remains outstanding in the books of the Chief Controller of Accounts, Ministry of External Affairs. This may be due to the reason that the Reserve Bank of India, New Delhi has shown the payment on account of the intended transfer of funds to the account of the Mission abroad in the month of March itself instead of doing the same on the date of actual transfer of funds on first of April. There may be occasions when the branch bank abroad has erroneously afforded credit to the account of the Mission in the month of March immediately on receipt of the advice instead of doing so on first of April. The balances so remaining outstanding will be reflected in Statement 13 of material for Finance Accounts rendered by the Chief Controller of Accounts, Ministry of External Affairs.

PRACTICAL EXAMPLES

1.1     The Ministry of External Affairs authorises the Public Accounts Department, RBI, New Delhi to remit Australian $63,700 to the Indian Mission at Canberra on the first of every month for three months from December, 1989. The RBI arranges remittance through normal banking channel namely through a branch of Public Sector Bank at Canberra and after making the remittance, sends a payment scroll to the Chief Controller of Accounts, Ministry of External Affairs converting Australian Dollars into Indian Rupees at the commercial rate prevalent on the date of effecting the remittance. Let us suppose payment scroll would indicate:

A$ 63,700          =     Rs.8,40,000 
Cable charges      =     Rs. 200

                                    Rs. 8, 40, 200

A note of this is kept in the Remittance Register and an entry is made in the compilation sheet and on receipt of the monthly statement in CAS-122 from RBI Nagpur, the following adjustments are made in accounts:-

Rs.8,40,200     Dr. 8658—Suspense Accounts
                        130 Remittances between Ministry of External Affairs and Missions

Rs.8,40,200     Cr. 8675—Deposits with Reserve Bank 
                        101 Central-Civil

The Canberra Mission would show the receipt of A$63,700 in its cash account for the month of December, 1989 and simultaneously show the value in Indian currency converted at official rate of exchange. Let us suppose it is Rs. 8,36,000. On receipt of the Cash Accounts the following entries are made:

Rs.8,40,200 (-)     Dr. 8658 -Suspense Accounts
                            130—Remittances between Ministry of External Affairs and Missions

Rs. 8,36,000         Dr. 8671—Departmental Balances
                             101 - Civil Canberra Mission

Rs.200                 Dr.2061—External Affairs
                            101—Embassies and Missions
                            -Office Expenses 

Rs.4,000                 Dr. 2075—Misc. General Services 
                            791—Loss by Exchange

1.2     The Ministry authorises the RBI New Delhi to make remittances of Swiss Francs 53,000 to Indian Embassy at Geneva. The procedure as above is equally applicable. The remittance let us suppose, as indicated in the payment scroll from the RBI, is as shown below:-

SFr.53,000 =         Rs.6,15,000 
Cable charges =     Rs. 150

                              Rs.6,15,150

Suppose Geneva Cash Account for December, 1989 indicates receipt as below:

SFr. 53,000     =    Rs.6,18,000

Following accounting entries are to be made on receipt of monthly statement (CAS-122) from RBI, CAS, Nagpur:-

Rs.6,15,150     Dr. 8658—Suspense Accounts 
                        130 Remittances between Ministry of External Affairs and Missions

Rs.6,15,150     Cr. 8675—Deposits with Reserve Bank
                        —101 Central-Civil

On receipt of the Cash Account the following entries are made:

Rs.6,15,150 (—)     Dr. 8658 - Suspense Accounts 
                                    130—Remittances between Ministry of External Affairs and Missions

Rs.6,18,000             Dr. 8671—Departmental Balances 
                                    101--Civil Geneva Mission

Rs.150                     Dr. 2061—External Affairs
                                101—Embassies and Missions 
                                —Office Expenses

Rs.3,000                 Cr. 0075—Misc. General Services 
                                791-Gain by Exchange.

 

 

Annexure 'A'

(Para 8.2.1

O/FE/757/55/91 
Government of India 
Ministry of External Affairs 
(Foreign Exchange Section)

New Delhi, March 11, 1991.

The Manager,
Reserve Bank of India,
New Delhi.

Subject:     Financing arrangements for Indian Missions/Posts abroad during 1st half of 1991-92 (Apr. to Sept., 91).

Dear Sir,

I am directed to request that necessary arrangements may kindly be made through some commercial bank for cable remittance of the following amounts to the Mission for covering its establishment charges as per details given below:-

a.     Name of the Mission/Post Embassy of India, Jakarta.
b.     Bank account No. 50-04-888.
c.      Address of the bank  ABN Bank, JL. Gatot Subroto KAV 35-36,
Lippo Centre Building
Jakarta Selatan.
Amount to be remitted Date on which funds are to be credited
(1) US $ 99, 000/-(US Dollars Ninety Nine 
Thousand only)
1-4-91
(2) US$99, 000/- (-do-) 1-5-91
(3) US $99,000/- (-do-) 1-6-91
(4) US $99,000/- (-do-) 1-7-91
(5) US $99,000/- (-do-) 1-8-91
(6) US $99,000/- (-do-) 1-9-91

2.     The debit of the amounts remitted including the remittance charges thereon may please be raised against the Chief Controller of Accounts, Ministry of External Affairs, New Delhi, under the head "8658-Suspense Accounts—Remittances between Ministry of External Affairs and the Missions abroad".

Yours faithfully,

Sd/- 
(SECTION OFFICER)

Copy forwarded to:—

1. The Chief Controller of Accounts, Ministry of External Affairs, New Delhi (Compilation Section-V).

2. Embassy of India, Jakarta,

3. The Manager, Indian Overseas Bank, F-47, Malhotra Building, Janpath, New Delhi-110001.

Section Officer (FE)