1. Roll and Function of Various Stake Holders towards External Assistance And Fund Flow Mechanism

2. Govt. of India - Ministry of Finance Department of Economic Affairs Department of Revenue Department of Expenditure Multilateral Institutions Division Bilateral Cooperation Division Budget Division Multilateral Relations Division AAA&D Division Department of Financial Services Economics Division Infra & Investment Division Divisions under DEA

3. FUNCTIONS of AA&AD 1.External Aid Accounting 2.Disbursements 3.Debt Servicing 4.Coordinating with Project Implementing Agency, Donor, Bank etc. 5.Budget for External Aid Receipts & Payment 6.Maintaining External Aid Statistics Debt Statistics and other Reports in computer system for management. Aid Accounts & Audit Division

4. Role of Borrower Ministry of Finance (DEA) (Multilateral Institutions and Bilateral Cooperation Divisions) FFacilitates Appraisal PProcessing and Negotiations SSigning of Agreements CCausing agreements to take effect FFollow up of project implementation and monitoring CCoordinating mid-term review and completion report to donor AAll other actions relating to Agreements viz. Amendments, Reallocation, etc.

5. Role of Project Implementing Authority HHelps in project appraisal SSigning project agreement EEnsuring proper procurement procedures acceptable to donor RResponsible for all project activities and sending periodical reports to donor MMaintaining proper accounting records based on sound financial management RResponsible for preparing reimbursement claims and sending the same to Aid Accounts & Audit Division, New Delhi EEnsuring timely audit of accounts and reports to donor by due date PPrepare completion report of the project identifying further phase of the project where donor can finance

6. Role of Aid Accounts & Audit Division(AA&AD)   Authorized signatory to withdraw funds from the loan accounts from the Donor   Responsible for maintaining special account for advance deposit received from the Donor and ensuring submission of audit certificate to the Donor   Arranges periodical payment to Donor of all loan charges and principal repayment by due date   Supplies disbursement details to PF-I, Department of Expenditure for release of Additional Central Assistance to State Governments.   Maintaining Sovereign Debt Statistics and reconciling the same periodically with Donor.   Rendering Periodical Accounts to C.G.A. for incorporation in the Union Finance Account.   Publication of Annual External Assistance Brochure.

7. Role of RBI towards External Aid   Repository of all Foreign Currencies Inflows   INR equivalent of Foreign Currency Flow from External Aid is passed on to the Credit of CAA&A   Maintenance of Loan-wise Special Account in disbursed currency for the advance/deposits received from Donors.   Coordinating with CAA&A for sending External Debt data to Donor and other institutions.   Providing Exchange Rate for Government transactions of major Foreign Currencies to AAAD on daily basis

8. Role of Commercial Bank towards External Aid   S.B.I., B.O.B., Canara Bank, BOI, UBI and PNB are designated banks.   Responsible for remitting foreign currencies to the donors towards repayment of principal and interest payment and other charges on due dates   Coordinates with CAA&A and RBI in discharge of their functions.

9. Multilateral Agreement   Agreement with an institution or bank whose capital is subscribed by two or more countries / institutions / banks to finance in different (multi) currencies equivalent to loan currency e.g. agreement with International Financial Institutions like World Bank, Asian Development Bank etc.

10. Bilateral Agreement   Agreement between two sovereign government   Financing can either be in the currency of the donor or different currency equivalent of loan designated in donor currency

11. Foreign Expenditure EExpenditure in the currency other than the currency of the borrower Local Expenditure EExpenditure in the currency of the borrower

12. PROJECT CYCLE Negotiations (Donor & Govt.) Appraisal By Donor Proposal To Donor Identification By Govt. Evaluation By Donor Project Completion Report Declaring The Agreement Effective Project Execution Financial Agreement Donor /GOI & Project Agreement Donor/ Project State

13. Disbursement Flow Chart Project Implementing Agency AA&A Div. Reimbursement Claims Under Revolving Fund Procedure Reimbursement Claims Not Under Revolving Fund And All Direct Payment Claims R.B.I. Mumbai AA&A Div. Donor office in India Donor Head Quarters Reimbursement Claims C.A.A.&A’s Account at RBI, New Delhi Through RBI Bombay Direct Payment Payees Account Advise AA&A Div. Claims Advice Statement

14. For Expenditure Budgeted at S.R. of F.C. by P.I.A Credit CAA&A’s Account S.R : Selling Rate of RBI. F.C. : Foreign Currency P.I.A. : Project Implementing Agency D.R. : Daily Rate D.O.E. : Department Of Expenditure P.F. Div. : Plan Finance Division C.A.S. : Central Accounts Section Claims AA&A Div. Donor through local office Payee’s AccountAdvise AA&A Div. Rs. at Selling Rate PMU Div. D.E.A P.F. Division at D.O.E. R.B.I. C.A.S. Nagpur. Cr/Dr. State Govt. Account Expenditure Incurred Interest. Fund Flow Chart Direct Payment Procedure

15. Fund Flow Chart- Reimbursement Procedure Expenditure Budget of P.I.A. Claims A.A.& A Div. For Claims Under Revolving FundFor Claims Outside Revolving Fund DonorRBI Mumbai A.A.& A. Div. Statement Disbursement to CAA&A Account P.F. Div. of D.O.E PAO ExpenditureRBI, C.A.S. Nagpur State Govt. Account- Credit P.I.A. : Project Implementing Agency P.F. : Plan Finance D.O.E. : Department of Expenditure C.A.S. : Central Accounts Section Through Loacl office

16. Back to Back Loans   12th Finance Commission recommended that External Assistance may be passed on to states on the same terms and conditions, on which the loans/grants are received by GOI.   Government of India has accepted this recommendation.   All External aid agreements for State Projects except for Special Category States w.e.f. 1 st April 2005 are now on Back to Back basis. However there is no change in upfront payment to donor by AAAD and for release of ACA by PF-I.