The Prasar Bharti (Broadcasting Corporation of India) Investment of Moneys Rules, 2007
Published vide Notification Gazette of India, Extra; Part 2, Section 3(i), dated 22nd December, 2007.
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No. G.S.R. 284(E), dated 22nd December, 2007. - In exercise of the powers conferred by Section 19 read with clause (i) of sub-section (ii) of Section 32 of the Prasar Bharti (Broadcasting Corporation of India) Act, 1990 (25 of 1990), the Central Government hereby makes the following rules for investment of moneys by the Corporation, namely :- 1. Short title and commencement. - (1) These rules may be called the Prasar Bharti (Broadcasting Corporation of India) Investment of Moneys Rules, 2007. (2) They shall come into force on the date of their publication in the Official Gazette. 2. Definitions. - (1) In these rules, unless, the context otherwise requires,--- (a) "Act" means the Prasar Bharti (Broadcasting Corporation of India) Act, 1990;
(b) "committee" means the Investment Committee, referred to in Rule 5;
(c) "credit rating agency" means an agency recognized by Securities and Exchange Board of India and Reserve Bank of India for the purpose of rating companies based on their debt servicing capacity;
(d) "debt investment" means any instrument through which loan is advanced to third party like loan, debentures, etc. :
(e) "short-term" means a period not exceeding one year;
(2) Words and expressions used in these rules and not defined but defined in the Act shall have the meanings assigned to them in the Act. 3. Investment of moneys in securities, etc. - The Corporation may invest its moneys in one or more of the following instruments subject, however, to the principles laid down in Rule 4, namely :- (i) term deposits with any nationalised banks, having a net-worth of at least rupees 100 crores, fulfilling the capital adequacy norm, as specified by the Reserve Bank of India, and as reflected in the last published balance sheet;
(ii) investments which have been rated by an established credit rating agency and have been accorded the highest safety as, certificate of deposits issued by nationalised banks;
(iii) any debt instrument which has obtained highest rating from an established credit rating agency
(iv) public accounts with the Government of India with the facility for withdrawal at any time;
(v) securities of the Central Government or any State Government.
4. Principles Governing Investment. - (1) The principles governing the investment shall be safety, returns, transparency and accountability. (2) Term deposits for the chosen shall be made from amongst the nationalised banks for the highest rate of interest and return. (3) Debt instruments carrying the maximum return amongst the eligible instruments of highest safety rating by the established credit rating agencies shall be selected. (4) Investments in Government securities through primary dealers charging the lowest commission shall be preferred. (5) For obtaining maximum returns and achieving transparency and accountability three competitive quotations from the eligible nationalised banks shall be chosen. (6) All investment decisions shall be taken in accordance with the rules, regulations and directions issued by the Central Government, as applicable. (7) The Corporation shall, in making investments of short-term surplus funds, be guided by the following principles, namely :-- (i) investment shall be made only in instruments with maximum safety;
(ii) there shall be no element of speculation on the yield obtaining from the investment.
(iii) the surplus availability may be worked out for a minimum one year at any point of time, in consultation with the Ministry of Information and Broadcasting;
(iv) there shall be a proper commercial appreciation before any investment decision on surplus funds is taken;
(v) funds shall not be invested at a particular rate of interest fora particular period of time, if the Corporation is resorting to borrowing at an equal or higher rate of interest for its requirements for the same period of time;
(vi) investment decisions shall be based on commercial judgment;
(vii) the availability should be worked out based on cash-flow estimates taking into account working capital requirements, replacement of assets and other demands;
(viii) the investment shall be only of temporary nature using temporary idle cash including refundable deposits and it shall not be used for investing from the funds kept outside the internal extra budgetary resources calculation;
(ix) the final maturity of investment shall not exceed one year from the date of investment.
5. Investment Committee. - (1) Decisions on investment of surplus funds shall be taken by an Investment Committee, consisting of the Executive Member, Member (Finance) and Member (Personnel). (2) The decision on investments shall be taken by the committee comprising a minimum of two Members. (3) Decision made under sub-rule (1) shall be placed before the Prasar Bharti Board for approval, in its next meeting. 6. Internal audit. - (1) Proper internal audit of the funds and investments shall be developed and the reports of the internal audit shall be reviewed by the Executive Member of the Corporation, from time to time. (2) Important observations shall be placed before the Prasar Bharti Board for approval.