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h) Advance can be granted only if the outstanding ofprevious advance, if any, with interest has been fullyrepaid.i) Purchase of vehicle should be made within one monthfrom the drawal of advance. The cash receipt (in allcases) and registration book (in cases other than bicycle)should be produced for verification. The registrationbook must be shown within one month of purchase ortwo months of drawal of advance. If the employee failsto do so the advance shall be refunded with the penalinterest.j) The vehicle after purchase should be hypothecated tothe government.k) Prior sanction of the loan sanctioning authority isnecessary for sale of the vehicle so long as the advanceand interest thereon is outstanding. The sale proceedsmust be used to payback advance and interest or forpurchase of a new car within a month. In the lattercase, the advance outstanding will be restricted to thecost of new car. Re-payment of the outstanding amountwould continue at the rate fixed.l) Recovery of advance will start from first pay/leavesalary/subsistence allowance after drawl of advance.m) Simple interest at prescribed rates, calculated onmonthly reducing balance basis will be recovered in oneor more instalments after the principal is recovered. Therate of interest charged for advances drawn in differentyears is given in para 20.4 of this chapter.n) Sanction order should indicate the rate of interest 2.5%higher than the prescribed rate with stipulation that2.5% rebate will be allowed for prompt payment.o) Even if repayment is made more than once in a month itwill be taken as a simple payment in a month forarriving balance for interest calculations.p) Sanctioning authority is department of CentralGovt/Administrator or Head of Deptt for cases otherthan bicycle and Head of Office in case of Bicycle. AnUnder Secretary who is Head of Office may authorise aSection Officer under him to sign, on his behalf,sanction of cycle advance.20.4.4 Motor Car advanceEligibility :Page 153 of 153