State Act

Tamil Nadu Panchayats Act 1994

181-D. Procedure for inter-panchayats lending.- (1) Any Panchayat may raise loan from any other Panchayat and any Panchayat may sanction loan to another Panchayat to carry out any of its statutory functions or for the creation of capital assets or income generating assets, with the prior sanction of the Inspector. (2) The procedure for the receipt, utilization and repayment of the loan under this section and Section 181-C shall be subject to such terms and conditions, as may be agreed upon by the Financial Institution or agency or bank or lending Panchayat, as the case may be, and the borrowing Panchayat. Every Panchayat shall maintain in respect of the loan, such books of accounts, as may be prescribed. (3) Every Panchayat shall utilize the loan only for the purposes for which such loans are borrowed.]