FINANCE, ACCOUNTS AND AUDITCentral

Section 27 of The Road Transport Corporations Act, 1950

Fund of the Corporation.

(1)Every Corporation shall have its own fund and all receipts of the Corporation shall be carried thereto and all payments by the Corporation shall be made therefrom.
(2)Except as otherwise directed by the State Government, all moneys belonging to that fund shall be deposited in the Reserve Bank of India or with the agents of the Reserve Bank of India, 1[or with the corresponding new banks constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980)] or invested in such securities as may be approved by the State Government.

Summary

Every Corporation must maintain its own dedicated fund.
All money the Corporation receives must be put into this fund.
All payments the Corporation makes must be paid out of this fund.
The money must be kept in the Reserve Bank of India, its authorized agents, or specific new banks.
Any remaining money can be invested in securities that the State Government approves.

Practical examples

1Every day, the cash collected from bus conductors across the city is counted and then deposited directly into the Corporation's account at the Reserve Bank of India.

2When the Corporation needs to pay its electricity bill for the bus stations, the Chief Accounts Officer writes a check that withdraws the money from the official Corporation Fund.

FAQ

1. What happens to the money a transport body earns under Section 27 of The Road Transport Corporations Act, 1950?

According to Section 27 of the Road Transport Corporations Act, 1950, all receipts or earnings must be placed into the Corporation's own fund.

2. Where is the Corporation's money kept under Section 27 of The Road Transport Corporations Act, 1950?

Section 27 of the Road Transport Corporations Act, 1950 states it should be in the Reserve Bank of India, its agents, specific new banks, or in approved securities.

3. Can a Corporation pay for its repairs using any bank account it wants under Section 27 of The Road Transport Corporations Act, 1950?

No, Section 27 of the Road Transport Corporations Act, 1950 requires all payments to be made from the specific Fund of the Corporation.

Test yourself

1.Under Section 27 of The Road Transport Corporations Act, 1950, where are all receipts of the Corporation carried?

2.According to Section 27 of The Road Transport Corporations Act, 1950, who must approve the securities the Corporation invests in?

3.Which bank is specifically named as a place for deposits under Section 27 of The Road Transport Corporations Act, 1950?

4.Under Section 27 of The Road Transport Corporations Act, 1950, how are payments made?

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