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State of Madhya Pradesh - Section
Section 46 in The M.P. Janpad Panchayats (Accounts) Rules, 1999
46. Forms of Security.
- Security to be taken from an employee should be in one of the following forms subject to the conditions noted against each, or partly in one and party in another of these when this is specially permitted by the officer authorised to accept the security.| Form | Conditions | |
| (a) | Cash | Janpad Panchayat will not pay any interest on the depositedamount. |
| (b) | Post office fixed deposit Certificates, National SavingsCertificates | The certificates should be formally transferred in favour ofthe Chief Executive officer, with the sanction of the Head PostMaster, and should be accepted at their surrender value at thelime of tender. |
| (c) | Deposit receipts of Scheduled Bank/ Co-operative Banks | (1) The deposit receipt should bemade in the name of the pledgee or, if it is made out in the nameof the pledger, the Bank should certify on it that the depositcan be withdrawn only on the demand or the demand or with thesanction of the pledgee.(2) The Bank should agree that onreceiving a withdrawal order from the pledgee in receipt of thedeposit, or any part thereof, it will pay the deposited amountwith interest to the pledgee.(3) The depositor should in writingundertake any risk involved in the investment.(4) The responsibility of the pledgee in connection with thedeposit and the interest on it still cease when be issued a finalwithdrawal order to the depositor and send the information to theBank that he has done so. |
| (d) | Fidelity bonds from Insurance Companies | A fidelity bond may be accepted as security from the servantof the Panchayat but not from a private party. The bond should bein the prescribed form. |
| (e) | Third party guarantee | The guarantor should not be related to the person on whosebehalf the guarantee is being given. The guarantee should also beaccompanied with a solvency certificate for an amount not lessthan four times of the amount of the required amount of security. |