The Government Securities Act, 2006

(1) This Act may be called the GovernmentSecurities Act, 2006. (2) This Act applies to Government securities created and issued whether before or after thecommencement 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, andto all the Union territories and it shall also apply to the State of Jammu and Kashmir which adopts thisAct 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 Unionterritories on such date1as the Central Government may, by notification in the Official Gazette, appointand in the State of Jammu and Kashmir which adopts this Act under clause (1) of article 252 of theConstitution, on the date of such adoption; and any reference in this Act to the commencement of this Actshall, in relation to any State or Union territory, means the date on which this Act, comes into force insuch State or Union territory.

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 ReserveBank 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 ofIndia Act, 1934 (2 of 1934); (c) "bond ledger account" means an account with the Bank or an agent in which the Governmentsecurities are held in a dematerialised form at the credit of the holder; (d) "constituents' subsidiary general ledger account" means a subsidiary general ledger accountopened 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 StateGovernment issuing the security; (f) "Government security" means a security created and issued by the Government for the purposeof raising a public loan or for any other purpose as may be notified by the Government in the OfficialGazette 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.

A Government security may, subject to such terms andconditions 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 theconstituents subsidiary general ledger account maintained in the books of the Bank, and transferable by registration in the books of the Bank.

(1) A subsidiary general ledger account including aconstituents' subsidiary general ledger account and a bond ledger account may be opened and maintainedby the Bank subject to such conditions and restrictions as may be specified and in such form and onpayment of such fee as may be prescribed. (2) Notwithstanding anything contained in the Benami Transactions (Prohibition) Act, 1988 (45 of1988), or any other law for the time being in force, the Government securities may be held on behalf of aconstituent in a constituents' subsidiary general ledger account under sub-section (1) and the holder ofsuch 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 toclaim from the holder all the benefits and be subjected to all the liabilities in respect of the Governmentsecurities held in the constituents' subsidiary general ledger account. (3) The holder of a constituents' subsidiary general ledger account shall maintain such records andadopt such procedure for safeguarding the interests of the constituents as may be specified.

(1) No transfer of a Government security shall be valid if itdoes not purport to convey the full title to the security. (2) The transfer of the Government securities shall be made in such form and in such manner as maybe prescribed. (3) Any document relating to a Government security or any endorsement on a promissory note issuedby the Government may, on the demand of a person who for any reason is unable to write, shall beexecuted on his behalf in such manner as may be prescribed. (4) Nothing in this section shall affect any order made by the Bank under this Act, or any order madeby a Court upon the Bank.