Conduct Rule No.16: Investment, Lending And Borrowing
16. Investment, Lending And Borrowing:-
(1) No Railway Servant shall speculate in any stock, share or other investment;
Provided that nothing in this Sub-Rule shall apply to occasional investments made through stock brokers or other persons duly authorized and licensed or who have obtained a certificate of registration under the relevant law.
Explanation:- Frequent purchase or sale or both, of shares, securities or other investments shall be deemed to be speculation within the meaning of this sub-rule.
[Authority: RBE No.12/1997, No.E(D&A)96/GS1-8, 17.01.1997, ACS No.39]
(2) (i) No Railway servant shall make, or permit any member of his family or any person acting on his behalf to make, any investment which is likely to embarrass or influence him in the discharge of his official duties. For this purpose, any purchase of shares out of the quotas reserved for Directors of Companies or their friends and associates shall be deemed to be an investment which is likely to embarrass the Railway servant.
[Authority: RBE No.12/1997, No.E(D&A)96/GS1-8, 17.01.1997, ACS No.39]
(2) (ii) No Railway servant who is involved in the decision making process of fixation of price of an Initial Public Offering or Follow-up Public Offering of shares of a Central Public Sector Enterprise shall apply, either himself or through any member of his family or through any other person acting on his behalf, for allotment of shares in the Initial Public Offerings or Follow-up Public Offerings of such Central Public Sector Enterprise.
[Authority: RBE No.128/2009, No.E(D&A)2009/GS1-4, 14.07.2009, ACS No.108]
(3) If any question arises whether any transaction is of the nature referred to in sub-rule (1) or sub-rule (2), the decision of the government thereon shall be final.
(4) (i) No railway servant shall, save in the ordinary course of business with a bank or a public limited company either himself or through any member of his family or any other person acting on his behalf;
(a) Lend or borrow or deposit money, as a principal or an agent, to or from or with, any person or firm or private limited company with whom he is likely to have official dealings or otherwise place himself under pecuniary obligation to such person or firm or private limited company; or
(b) Lend money to any person at interest or in a manner whereby return in money or in kind is charged or paid.
Provided that a railway servant may give to, or accept from, a relative or a personal friend, a purely temporary loan of a small amount free of interest, or operate a credit account with a bona fide tradesman or make an advance or pay to his private employee.
Provided further that nothing in this sub-rule shall apply in respect of any transaction entered into by a railway servant with the previous sanction of the Government.
(ii) When a railway servant is appointed or transferred to a post of such nature as would involve him in the breach of any of the provisions of sub-rule (2) or sub-rule (4), he shall forthwith report the circumstances to the competent authority and shall thereafter act in accordance with such order as may be made by such authority.
Railway Ministry’s Decision:-
Loan taken from LIC by the Railway servant against their Insurance policies will be covered by the exception provided in the above rule and permission of the Government will not be necessary.
[Authority: No.E(D&A)68/GSI/21, 21.11.1968]