GOVERNMENT SECURITIES ACT, 2006
19. Stay of proceedings on order of Court
20. Cancellation by Bank of vesting proceedings
21. Discharge in respect of interest on Government securities
22. Discharge in respect of bearer bonds
23. Period of limitation of Governments liability in respect of interest
24. Inspection of documents
25. Micro lms, facsimile copies of documents, magnetic tapes and computer print-outs as documents of evidence 17
26. Bank and its of cers to be public of cers
27. Misuse of subsidiary general ledger account facility
28. Pledge, hypothecation or lien
29. Power to call for information, cause inspection and issue directions
30. Contravention and penalties
31. Certain laws not to apply to Government securities
Powers of Bank not to apply to International Financial Services
32. Power to make regulations
33. [Omitted by the Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order, 2020, w.e.f. 18-3-2020]
34.
GOVERNMENT SECURITIES REGULATIONS, 2007
3. Subsidiary general ledger account including a constituents’ subsidiary general ledger account and bond ledger account
4. Transfer of Government securities
5. Execution of a document or endorsement by a person unable to write 29
6. Recognition of title to Government security of a deceased holder 29
CHAPTER III
7. Nomination in respect of Government securities
8. Nomination in case of minor
9. Effect of nomination on renewal, etc.
CHAPTER IV
ISSUE OF DUPLICATE OR NEW GOVERNMENT SECURITIES
10. Procedure for issue of duplicate Government security, etc.
11. Procedure when a Government promissory note is lost, etc.
12. Loss of a bearer bond or a prize bond
13. Procedure when a stock certificate is lost, etc.
14. Publication of list 34
15. Consideration of a mutilated security for issuance of its duplicate or renewal
16. Procedure for issue of new securities on conversion, consolidation, sub-division and renewal
CHAPTER V SUMMARY DETERMINATION AND VESTING ORDER
17. Procedure for making vesting order
CHAPTER VI
GRANT OF INFORMATION AND INSPECTION OF DOCUMENTS
18. Application for grant of information or inspection relating to Government security
19. Disposal of application for grant of information or inspection
20. Indemnity bond in connection with grant of information or inspection
CHAPTER VII
PLEDGE, HYPOTHECATION OR LIEN OF GOVERNMENT SECURITY
21. Pledge, Hypothecation or Lien of Government security
22. General provisions relating to pledge, hypothecation and lien
: Transfer of stock held in the Reserve Bank of India (RBI) in the Subsidiary General Ledger account (SGL) including a Constituents’ Subsidiary General Ledger account (CSGL)
Government Securities Act, 2006
[38 OF 2006]1
An Act consolidate and amend the law relating to Government securities and its management by the Reserve Bank of India and for matters connected therewith or incidental thereto.
WHEREAS it is expedient to consolidate and amend the law relating to Government securities and its management by the Reserve Bank of India;
AND wHEREAS Parliament has no power to make laws for the States with respect to any of the matters aforesaid except as provided in articles 249 and 250 of the Constitution;
AND wHEREAS in pursuance of clause (1) of article 252 of the Constitution, resolutions have been passed by the houses of the Legislatures of all the States, except the Legislature of the State of Jammu and Kashmir, to the effect that the matters aforesaid should be regulated in those States by Parliament by law;
BE it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows:—
Short title, application and commencement.
1. (1) This Act may be called the Government Securities Act, 2006.
(2) This Act applies to Government securities created and issued whether before or after the commencement of this Act by the Central Government or a State Government.
(3) It applies* in the first instance to whole of the States, except the State of Jammu and Kashmir, and to all the Union territories and it shall also apply to the State of Jammu and Kashmir which adopts this Act by resolution passed in that behalf under clause (1) of article 252 of the Constitution.
(4) It shall come into force in all the States, except the State of Jammu and Kashmir, and in the Union territories on such date2 as the Central Government may, by
1. Dated 30-8-2006.
2. W.e.f. 1-12-2007.
* With effect from 31-10-2019, vide Jammu and Kashmir Reorganisation (Removal of Difficulties) Order, 2019, this Act is made applicable to the Union Territory of Jammu and Kashmir and Union Territory of Ladakh.
notification in the Official Gazette, appoint and in the State of Jammu and Kashmir which adopts this Act under clause (1) of article 252 of the Constitution, on the date of such adoption; and any reference in this Act to the commencement of this Act shall, in relation to any State or Union territory, means the date on which this Act, comes into force in such State or Union territory.
COMMENTS
SECTION NOTES
Application of this Act
This Act applies to Government securities [See Section 2(f) and Section 3] created and issued by the Central Government or a State Government, irrespective of whether they were created and issued before or after the commencement of this Act
The Public Debt Act, 1944 shall cease to apply to the Government securities to which this Act applies and to all matters for which provisions have been made by this Act.
[See Section 31(1)]
The Depositories Act, 1996 or the regulations made thereunder shall not apply to Government securities covered by this Act unless an agreement is executed to the contrary by any depository under the Depositories Act, 1996 with the Government or the RBI, as the case may be. [See Section 31(3)]
Definitions.
2. 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.
3
COMMENTS
SECTION NOTES
Agent [Section 2(a)]
“Agent” means a scheduled bank [See clause (e) of section 2 of the Reserve Bank of India Act, 1934], or any other person speci ed as such.
Bank [Section 2(b)
“Bank” means the Reserve Bank of India [See Section 3 of the Reserve Bank of India Act, 1934].
Government Security (G-Sec) [Section 2(f) read with Section 2(e)]
“Government security” means a security created and issued by the Central Government or the State Government and having one of the forms mentioned in section 3.
Such security may be created and issued for the purpose of raising a public loan or for any other purpose as may be noti ed by the Government in the Of cial Gazette.
Bond Ledger Account [Section 2(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.
See also Section 4
Constituents’ Subsidiary General Ledger Account [Section 2(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.
See also Sections 4 and 27
Promissory Note [Section 2(h)]
“Promissory note” includes a treasury bill.
Forms of Government securities
3. A Government security may, subject to such terms and conditions as may be specified, be in such forms as may be prescribed or in one of the following forms, namely:—
(i) a Government promissory note payable to or to the order of a certain persons; or
(ii) a bearer bond payable to bearer; or
(iii) a stock; or
(iv) a bond held in a bond ledger account.
Explanation.—For the purpose of this section, “stock” means a Government security,—
(i) registered in the books of the Bank for which a stock certificate is issued; or
(ii) held at the credit of the holder in the subsidiary general ledger account including the constituents subsidiary general ledger account maintained in the books of the Bank, and transferable by registration in the books of the Bank.
COMMENTS
SECTION NOTES
A G-Sec may be in such forms as may be prescribed or in one of the following forms, namely:—
(i) a Government promissory note payable to or to the order of a certain person; or
(ii) a bearer bond payable to bearer; or (iii) a stock; or
(iv) a bond held in a bond ledger account.
Stock
“Stock” means a G-Sec which: Satis es one of the following criteria
(i) registered in the books of the Bank(RBI) for which a stock certi cate is issued; or (ii) held at the credit of the holder in the subsidiary general ledger account including the constituents subsidiary general ledger account maintained in the books of the RBI, and is transferable by registration in the books of the RBI.
Subsidiary general ledger account.
4. (1) A subsidiary general ledger account including a constituents’ subsidiary general ledger account and a bond ledger account may be opened and maintained by the Bank subject to such conditions and restrictions as may be specified and in such form and on payment of such fee as may be prescribed.
(2) Notwithstanding anything contained in the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)*, or any other law for the time being in force, the Government securities may be held on behalf of a constituent in a constituents’ subsidiary general ledger account under sub-section (1) and the holder of such account shall be deemed to be the holder of the securities held in that account:
Provided that the constituent as a beneficial owner of the Government security shall be entitled to claim from the holder all the benefits and be subjected to all the liabilities in respect of the Government securities held in the constituents’ subsidiary general ledger account.
(3) The holder of a constituents’ subsidiary general ledger account shall maintain such records and adopt such procedure for safeguarding the interests of the constituents as may be specified.
* Now “The Prohibition of Benami Property Transactions Act, 1988”.
GOVERNMENT SECURITIES ACT 2006 WITH GOVERNMENT SECURITIES REGULATIONS 2007 – BARE ACT WITH SECTION NOTES
AUTHOR : TAXMANN'S EDITORIAL BOARD
PUBLISHER : TAXMANN
DATE OF PUBLICATION : JANUARY 2025
EDITION : 2025 EDITION
ISBN NO : 9789364555791
NO. OF PAGES : 64
BINDING TYPE : PAPERBACK
DESCRIPTION
Government Securities Act 2006 with Government Securities Regulations 2007 [Bare Act with Section Notes] by Taxmann is a consolidated and authoritative reference on India's principal legislation for creating, issuing, transferring, and managing Government securities. It presents the bare text of the Act and Regulations and concise notes on each section, covering legal and procedural requirements for government bonds, promissory notes, stock certificates, subsidiary general ledger accounts, and more. It is intended for the following audience:
• Legal Professionals & Practitioners
• Bankers & Financial Institutions
• Corporate Treasurers & Compliance Officers
• Government Departments & Regulators
• Academics & Researchers
• Investors & Market Participants
The Present Publication is the 2025 Edition, covering the amended and updated text of the Government Securities Act 2006 [Act No. 38 of 2006] and Government Securities Regulations 2007, with the following noteworthy features:
• [Complete Text of the Act & Regulations] Updated statutory provisions
• [Section Notes] Concise commentary explaining legislative intent
• [Updated with the Jan Vishwas (Amendment of Provisions) Act 2023] Incorporates amendments for decriminalisation and ease of doing business
• [Pre-amendment Provisions] Provides earlier text in footnotes for contextual reference
• [Cross Referencing] Ensures a holistic view of interlinked sections
• [User-friendly Layout] Clear headings, sub-headings, and navigational aids
• [Practical Inputs for Compliance] Guidance on subsidiary ledger accounts, pledging/hypothecating bonds, etc.
