SMALL INDUSTRIES GENERAL, FUND, ACCOUNTS AND AUDITCentral

Section 31 of The Small Industries Development Bank of India Act, 1989

Save as otherwise provided in sub-section (4) of section 25, nothing contained in this Chapter shall apply to the Small Industries Development Assistance Fund.

Summary

The rules in Chapter VI mostly govern the general funds and accounting of the bank.
This section acts as an exception, clarifying that Chapter VI does not apply to the Small Industries Development Assistance Fund.
However, it preserves one specific cross-referenced rule (Section 25) regarding how audits are conducted for that special fund.

Practical examples

1An accountant realizes that a general rule for surplus profits does not apply to the money sitting in the Small Industries Development Assistance Fund, because this section legally separates it from standard rules.

2An auditor checking the Assistance Fund in 2028 still demands to question the staff about a missing voucher. The staff must comply because the specific audit powers from the general rules are preserved for the Assistance Fund.

FAQ

1. Do the general accounting rules of the bank apply to the Assistance Fund?

Generally, no. This section specifically states that the rules of this Chapter do not apply to the Assistance Fund, except for a few specific audit procedures.

2. Why is there an exception mentioned for Section 25?

Because Section 25 contains the rules for auditing the Assistance Fund, and it borrows specific powers (like auditor access to books) from the general audit rules.

3. What is the main purpose of this provision?

To ensure the Assistance Fund is managed and treated as a distinct entity from the bank's general operations, preventing the general rules from overriding its special rules.

Test yourself

Q1.Under Section 31 of The Small Industries Development Bank of India Act, 1989, which fund is explicitly exempted from the general rules of Chapter VI?

Q2.Section 31 of The Small Industries Development Bank of India Act, 1989 creates an exemption but saves one rule by cross-referencing sub-section (4) of Section 25. What practical effect does this cross-reference have?

Q3.If a director claims that all rules regarding the Small Industries General Fund apply equally to the Assistance Fund, how does Section 31 of The Small Industries Development Bank of India Act, 1989 address this?

Q4.Under Section 31 of The Small Industries Development Bank of India Act, 1989, what is the only reason a rule from Chapter VI would apply to the Assistance Fund?

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