Government Securities Act, 2006
No: 38 Dated: Aug, 30 2006
Government Securities Act, 2006
(Act No 38 of 2006)
An Act to consolidate and amend the law relating to Government securities and its management by the Reserve Bank of India and for matters connected therewith or incidental thereto.
WHEREAS it is expedient to consolidate and amend the law relating to Government securities and its management by the Reserve Bank of India;
AND WHEREAS Parliament has no power to make laws for the States with respect to any of the matters aforesaid except as provided in articles 249 and 250 of the Constitution;
AND WHEREAS in pursuance of clause (1) of article 252 of the Constitution, resolutions have been passed by the Houses of the Legislatures of all the States, except the Legislature of the State of Jammu and Kashmir, to the effect that the matters aforesaid should be regulated in those States by Parliament by law;
BE it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows:—
1. Short title, application and commencement.—(1) This Act may be called the Government Securities Act, 2006.
(2) This Act applies to Government securities created and issued whether before or after the commencement of this Act by the Central Government or a State Government.
(3) It applies in the first instance to whole of the States, except the State of Jammu and Kashmir, and to all the Union territories and it shall also apply to the State of Jammu and Kashmir which adopts this Act by resolution passed in that behalf under clause (1) of article 252 of the Constitution.
(4) It shall come into force in all the States, except the State of Jammu and Kashmir, and in the Union territories on such date as the Central Government may, by notification in the Official Gazette, appoint and in the State of Jammu and Kashmir which adopts this Act under clause (1) of article 252 of the Constitution, on the date of such adoption; and any reference in this Act to the commencement of this Act shall, in relation to any State or Union territory, means the date on which this Act, comes into force in such State or Union territory.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “agent” means a scheduled bank within the meaning of clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934), or any other person specified as such;
(b) “Bank” means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);
(c) “bond ledger account” means an account with the Bank or an agent in which the Government securities are held in a dematerialised form at the credit of the holder;
(d) “constituents" subsidiary general ledger account” means a subsidiary general ledger account opened and maintained with the Bank by an agent on behalf of the constituents of such agent;
(e) “Government”, in relation to any Government security, means the Central or State Government issuing the security;
(f) “Government security” means a security created and issued by the Government for the purpose of raising a public loan or for any other purpose as may be notified by the Government in the Official Gazette and having one of the forms mentioned in section 3;
(g) “prescribed” means prescribed by regulations made under this Act;
(h) “promissory note” includes a treasury bill;
(i) “specified” means specified by the Bank in the Official Gazette
3. Forms of Government securities.—A Government security may, subject to such terms and conditions as may be specified, be in such forms as may be prescribed or in one of the following forms, namely:—
(i) a Government promissory note payable to or to the order of a certain persons; or
(ii) a bearer bond payable to bearer; or (iii) a stock; or (iv) a bond held in a bond ledger account.
Explanation.—For the purpose of this section, “stock” means a Government security,—
(i) registered in the books of the Bank for which a stock certificate is issued; or
(ii) held at the credit of the holder in the subsidiary general ledger account including the constituents subsidiary general ledger account maintained in the books of the Bank, and transferable by registration in the books of the Bank.