Section 2 of The Government Securities Act, 2006
Definitions.
In this Act, unless the context otherwise requires,--
- (a)"agent" means a scheduled bank within the meaning of clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934), or any other person specified as such;
- (b)"Bank" means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);
- (c)"bond ledger account" means an account with the Bank or an agent in which the Government securities are held in a dematerialised form at the credit of the holder;
- (d)"constituents' subsidiary general ledger account" means a subsidiary general ledger account opened and maintained with the Bank by an agent on behalf of the constituents of such agent;
- (e)"Government", in relation to any Government security, means the Central or State Government issuing the security;
- (f)"Government security" means a security created and issued by the Government for the purpose of raising a public loan or for any other purpose as may be notified by the Government in the Official Gazette and having one of the forms mentioned in section 3;
- (g)"prescribed" means prescribed by regulations made under this Act;
- (h)"promissory note" includes a treasury bill;
- (i)"specified" means specified by the Bank in the Official Gazette.
Summary
- The word Bank refers specifically to the Reserve Bank of India.
- An agent is defined as a scheduled bank or any other specifically approved person.
- A bond ledger account is an account with the Bank or an agent where securities are kept in a digital or dematerialised form.
- A constituents' subsidiary general ledger account is maintained by an agent at the Bank on behalf of the agent's clients.
- The word Government means the specific Central or State Government that issued the security.
- A promissory note is defined to include a treasury bill.
Practical examples
FAQ
1. When the Act mentions the Bank, does it mean any commercial bank?
No, the Bank specifically means the Reserve Bank of India.
2. Can a regular treasury bill be considered a promissory note under this law?
Yes, the definition of a promissory note expressly includes a treasury bill.
3. What is the purpose of a constituents' subsidiary general ledger account?
It is an account opened by an agent at the Reserve Bank of India to hold securities on behalf of the agent's clients (constituents).
Test yourself
1.Under Section 2 of The Government Securities Act, 2006, which institution is exclusively referred to when the Act uses the term "Bank"?
2.Under Section 2 of The Government Securities Act, 2006, what must a security be in order to be considered a "Government security" in relation to Section 3?
3.Under Section 2 of The Government Securities Act, 2006, what is a "bond ledger account"?
4.Under Section 2 of The Government Securities Act, 2006, how is a "promissory note" defined in the context of government securities?