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State of Madhya Pradesh - Section
Section 44 in The M.P. Gram Panchayats (Accounts) Rules, 1999
44. Form of Security.
- Security to be taken from an employee or private person, firm or company should be in one of the following forms subject to the conditions noted against each, or partly in one and partly in another of these forms when this is specially per mil led by the officer| Form | Conditions | ||
| (a) | Cash | Panchayat will not pay any interest on thedeposit. | |
| (b) | Post office fixed deposit certificates, National SavingCertificates. | The certificates should be formally transferredto the Sarpanch who takes the deposit with sanction of the HeadPost Master, and should be accepted at their surrender value atthe time of tender. | |
| (c) | Deposit receipts of Scheduled Banks/Co-operative Banks. | (1) | The deposit receipt should be made out in thename of the pledgee or, if it is made out in the name of thepledger, the bank should certify on it that the deposit can bewithdrawn only on the demand or with the sanction of thepledgee. |
| (2) | The bank should agree that on receiving awithdrawal order from the pledgee in receipt of the deposit, orany part thereof, it will pay the deposited amount with interestto the pledgee. | ||
| (3) | The depositor should in writing undertake anyrisk involved in the investment. | ||
| (4) | The responsibility of the pledge in connectionwith the deposit and the interest on it will cease when heissues a final withdrawal order to the depositor and sends theinformation to the bank that he has done so. | ||
| (d) | Fidelity bonds from Insurance Companies. | A fidelity bond may be accepted as securityfrom the servant of the Panchayat but not from a private party.The bond should be in the prescribed form. | |
| (e) | Third party guarantee. | The guarantor should not be related to theperson on whose behalf the guarantee is given. The guaranteeshould be accompanied with the solvency certificate for anamount not less than 4 times of the required amount of security. |