CONTENTS - Central Public Works Department

SECTION 21
21.3 Forms of Security Deposit
(1) The security from a contractor should be taken in one of the forms recognized by the Government
of India as given below. Conditions noted against each form of security deposit should invariably
be kept in view. The recognized forms of interest bearing securities and the conditions to which
they are subject, are indicated below:
Forms of security
(i) Promissory notes and stock certificates of
the Central Government or a State Government.
(ii) Post Office cash certificates, National
Savings certificates, Treasury Savings Deposit
Certificates, National Plan Savings Certificates,
12 Years National Defence Certificates, and 10
Years Defence Deposit Certificates.
(iii) (a) 10 Years Social Security Certificate
(b) Post Office Savings Bank Pass Books.
Conditions
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(1) These securities shall be accepted at 5%
below their market price or at their face value,
whichever is less, and shall be dealt with in
accordance with the rules in chapter IX of
Government Securities Manual.
(2) The market price of Government paper should
be ascertained at the time of collection of
interest and the amount of interest to the extent
of deficiency in value of the Government paper
withheld, if necessary
(1) These certificates shall be formally transferred
to the President. The departmental authorities
authorized to accept security under Rule 275
of GFR’s shall accept the same with the
sanction of the Post Master of the office of
registration at their surrender value at the time
of tender.
(2) Certificates which are not held in the name of
the person furnishing the security shall not be
accepted.
The pledging of 10 Years Social Security
certificates should be in accordance with the
procedure laid down in Rules governing these
certificates
(1) A Pass Book for a deposit made under the
Post Office Savings Bank Rules may be
accepted as security provided that the
depositor has signed and delivered to the Post
Master a letter in the prescribed form as
required by those rules.
(2) Security Deposit lodged in the Post Office
Savings Bank should be hypothecated to the
Divisional Officer, if this has been specially
authorized by the Local Administration.
(3) The pass books should remain in the custody
of the Officer to whom the deposits are
pledged.
(4) The pass books shall be sent to the Post
Offices as soon as possible after the 15th
June of each year, so that the necessary
entries on account of interest may be made in
them.