A Grama Sasan shall-(a)repay the loan taken from the State Government in accordance with the terms and conditions imposed by the State Government in respect of such loan;(b)pay interest on such loan at the rate or rates and as per the terms and conditions imposed by the State Government in respect of such loan :Provided that if the amount of loan taken from the State Government or any instalment of such loan or interest payable in respect of such loan is not paid by a Grama Sasan within the period fixed by the State Government in that behalf, the Grama Sasan shall be liable to pay interest at 2 per cent in respect of such instalments of principal or interest, as the case may be, in addition to the interest fixed in respect of such loan :Provided further that, if the whole or any part of a loan taken from the State Government by a Grama Sasan is not utilised for the purpose for which it was taken within the period by the State Government in respect of such loan, the Grama Sasan shall be liable to pay interest at 12½ per cent per annum in respect of the unutilised amount from the date of disbursement of the loan.
