Chapter 74:04 - General Local Loan

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L.R.O. 1/2012
LAWS OF GUYANA
GENERAL LOCAL LOAN ACT
CHAPTER 74:04
Act
25 of 1941





(inclusive) by L.R.O.
Pages Authorised
Current Authorised Pages
1 – 15 ... 1/2012
LAWS OF GUYANA
2 Cap. 74:04 General Local loan
Note
on
Subsidiary Legislation
This Chapter contains no subsidiary legislation.
L.R.O. 1/2012
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L.R.O. 1/2012
CHAPTER 74:04
GENERAL LOCAL LOAN ACT
ARRANGEMENT OF SECTIONS
SECTION
1. Short Title.
2. Application.
3. Loans to be raised by debentures.
4. Loans to be a charge upon general revenue.
5. Borrowing upon debentures.
6. Amount of each debenture.
7. Debentures may be either fixed-date or drawing debentures.
8. Debentures to be declared to be either bearer debentures or registered
debentures.
9. Interest coupons.
10. Amount of half-yearly payments on equated-annuity debentures.
11. Form of debenture and coupons.
12. Debentures and coupons transferable by delivery.
13. Transfer of registered debentures.
14. Register of debentures.
15. Payment of interest.
16. Mode of providing for payment of interest on debentures and for
contributions to sinking fund.
17. (1) Creation of sinking fund for redemption of debentures payable on
a fixed date.
(2) Conditional power to suspend payments to the sinking fund.
18. Disposal of sinking fund when debentures are redeemed by purchase
or annual drawings.
19. (1) Appointment of date for drawing of debentures.
(2) Notice of time and place appointed for drawing.
(3) Mode of drawing.
(4) Notice of debentures drawn for redemption.
(5) Payment of drawn debentures.
20. Interest to cease to accrue as from date appointed for payment of
principal.
21. Redeemed debentures to be cancelled.
22. Expenses of redemption to be borne by sinking fund.
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4 Cap. 74:04 General Local loan
SECTION
23. Renewal of fixed-date debentures and issues of fixed-date debentures
in lieu of interest falling due on fixed-date debentures.
24. Issue of fixed-date debentures in lieu of amounts payable on equated
annuity debentures.
25. Issue of fixed-date debentures in lieu of Treasury Bills.
26. Interest payable upon fixed-date debentures issues under sections 23, 24
and 25.
27. Issue of fixed-date debenture under section 23, 24 or 25 to be deemed to
be repayment of principal for certain purposes.
__________________________ 1953 Ed.
c. 290 _______________________________________________________
24 of 1941 An Act to declare the terms and conditions applicable to
local loans authorised by any Act to be raised by the
Minister; and to provide for matters connected
therewith.
[6TH DECEMBER, 1941]
Short title
Application.

Loans to be
raised by
debentures.
Loans to be a
charge upon
general
revenue.
1. This Act may be cited as the General Local Loan
Act.
2. This Act shall be applicable only to loans raised
locally in Guyana.
3. Whenever by an Act authority shall have been
given to the Minister to raise any sum of money for the
purposes mentioned in such Act the Minister may from time
to time as he may deem expedient raise such sum by
debentures issued under the provisions of this Act.
4. The principal moneys and interest represented
by such debentures are hereby charged upon, and shall be
payable out of the Consolidated Fund.
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Borrowing
upon
debentures.
[13 of 1965]

Amount of each
debenture.

Debentures
may be either
fixed date or
drawing
debentures.
[13 of 1965
9 of 1975]

5. (1) Such debentures shall be issued in Guyana
upon the best and most favourable terms that can be obtained
and shall be signed by the Minister responsible for finance
(in this Act referred to as “the Minister”) or by any other
person or persons specially authorised by him.
(2) It shall be a sufficient compliance with
subsection (1) if a debenture bears the facsimile signature of
the Minister or of the person or persons specially authorised
by him to sign debentures.
6. Every debenture issued under this Act shall be for
a sum of not less than fifty dollars.
7. The debentures shall be redeemable either—
(a) at par on a fixed date to be declared on the
issue of the debentures such date not being
later than sixty years from the date of issue
(such debentures being hereinafter referred
to as “fixed-date debentures”):
Provided that the Minister may reserve the option to
redeem the debentures prior to such date on such conditions
as may be declared at the time of issue; or
(b) by annual drawings at par to be made in the
manner hereinafter provided or, at the
option of the Minister, by purchase in the
market (such debentures being hereinafter
referred to as “drawing debentures”); or
(c) by equal half-yearly or annual
instalments of principal and interest as may
be provided by the terms of the loan
combined so as to repay the principal with
interest over a fixed repayment period to be
declared on the issue of the debentures, such
LAWS OF GUYANA
6 Cap. 74:04 General Local loan

Debentures to
be declared to
be either bearer
debentures or
registered
debentures.

Interest
coupons.
[13 of 1965
9 of 1975]
Amount of half-
yearly payments
on equated
annuity
debentures.
[13 of 1965
9 of 1975]
Form of
debenture and
coupons.
[13 of 1965]
period not to exceed sixty years from the
date of issue (such debentures being
hereinafter referred to as “equated annuity
debentures”) and with such moratorium as
may be so provided.
8. Debentures issued under this Act may be declared
on issue to be either—
(a) transferable by delivery (such
debentures being hereinafter referred
to as “bearer debentures”); or
(b) transferable only by instruments of
transfer registered in the books of the
Accountant General (such debentures
being hereinafter referred to as
“registered debentures”).
9. There shall be attached to every bearer debenture
coupons for the payment of interest to become due in each
half-year or annually, as the case may be, upon the
principal represented by the bearer debenture. The coupons
shall be sufficient in number to provide for the payment of
the interest either during the whole period for which the
bearer debenture has to run or for such limited period as the
Minister may determine.
10. There shall be stated on each equated-annuity
debenture, the number and the amount of the half-yearly or
annual payments whereby the obligation to repay the
principal with interest shall be satisfied.
11. The bearer debentures and the coupons thereto
shall be in such form as the Minister may direct or approve.
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Debentures and
coupons
transferable by
delivery.
[13 of 1965]

Transfer of
registered
debentures.
Register of
debentures.
[13 of 1965]
Payment of
interest.
[13 of 1965]

Mode of
providing for
payment of
interest on
debentures and
for contribu-
tions to
sinking fund.
[13 of 1965
9 of 1975]
12. Every bearer debenture and coupon, and the right
to receive the principal and interest represented thereby, shall
be transferable by delivery.
13. Every registered debenture shall be transferable
by application in writing to the Accountant General.
Particulars of the holder to which each registered debenture
was first issued, and of each transfer of ownership, including
the name and address of each holder, shall be recorded in a
register to be kept for that purpose by the Accountant
General.
14. Particulars of each debenture shall, before the
issue thereof, be recorded in a register to be kept for that
purpose at the Treasury.
15. The interest upon the principal represented by
each fixed-date or drawing debenture shall run from the date
specified in that behalf in the debenture and shall be paid
half-yearly, on the dates specified in that behalf in the
debenture, at the Treasury.
16. (1) So long as any of the fixed-date or drawing
debentures remain outstanding, the Minister shall, in each
half-year ending with the date on which the interest on the
debentures falls due, appropriate out of the Consolidated
Fund a sum equal to one half-year’s interest on the whole of
the debentures issued including any which may have been
redeemed.
(2) The Minister shall also, in each such half-year
commencing with that specified in the Act authorising the
loan, appropriate out of the Consolidated Fund, for the
formation of a sinking fund, an additional sum equal to one-
half of the annual contribution to be decided upon by the
Minister on the issue of the loan. Such contribution shall be in
respect of the total nominal amount of all the fixed-date or
LAWS OF GUYANA
8 Cap. 74:04 General Local loan
Creation of
sinking fund
for redemption
of debentures
payable on a
fixed date.
4 of 1977
Conditional
power to
suspend
payments to the
sinking fund.
drawing debentures issued including any which may have
been redeemed.
(3) The Minister shall in respect of all equated-
annuity debentures appropriate in each half-year or annually,
as the case may be, during the repayment period out of the
Consolidated Fund a sum equal to the half-yearly or annual
instalment of principal and interest payable.
(4) For the purposes of this Act fixed-date or
drawing debentures shall not be deemed to be outstanding by
reason only that one or more of the debentures have not been
presented for payment on the date appointed for payment
and have in consequence not been paid.
17. (1) Subject to this section, in the case of fixed-date
debentures so much of the moneys appropriated as aforesaid
as shall not be required for the immediate payment of interest
shall be deposited with and held by the Bank of Guyana as
trustee for the formation of a sinking fund and the Bank shall
invest the money in the purchase of such securities as may be
approved by the Minister as a sinking fund for the final
extinction of the debt and shall also invest the dividends,
interest or produce of such investments in the purchase
of like securities and may from time to time, with the
approval of the Minister, change any such investments and
shall hold such fund in trust for the repayment of the
principal moneys for the time being represented by the
debentures.
(2) If at any time the trustees of the sinking fund
are satisfied that the value of the fund will be sufficient with
further accumulation of interest, but without further
payments of contributions, to enable the debentures to be
redeemed out of the proceeds of the sinking fund when the
same shall fall due to be redeemed the Minister may suspend
further payment of the contributions to the said sinking fund:
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Disposal of
sinking fund
when
debentures are
redeemed by
purchase or
annual
drawings.
[13 of 1965]
Appointment
of date for
drawing of
debentures.
[13 of 1965]
Notice of time
and place
appointed for
drawing.
Mode of
drawing.
Provided that the payment of contributions to the
sinking fund shall be resumed if the trustees shall at any time
inform the Governor that such payments have become
necessary.
18. In the case of drawing debentures, so much of the
moneys appropriated as aforesaid as shall not be required for
the immediate payment of interest, and the accumulations
thereon, shall be held by the Accountant General in trust to
apply them to the purchase of the debentures when they can
be obtained at a price not exceeding par and secondly to the
redemption of the debentures by means of annual drawings
in the manner provided in the section next following.
19. (1) After the commencement of the contributions
to the sinking fund in respect of any loan, and so long
thereafter as any of the debentures remain outstanding, the
Minister shall in every year, unless the whole of the money
applicable in that year to the redemption of debentures has
been applied in the purchase thereof, appoint a date in that
year for the drawing by lot of the debentures to be redeemed.
(2) If a date is appointed for drawing, the Minister
shall, by notice published in the Gazette and in at least one
local newspaper, give not less than fifteen days previous
notice of the date on which, and the hour and place at which,
the drawing will take place.
(3) On the date and at the hour and place so
specified the Accountant General, or any other officers
appointed by the Minister for the purpose, shall hold a
meeting at which the holder of any debenture may, if he think
fit, be present and one of the aforementioned officers shall
then, in the presence of such debenture holders, if any, draw
by lot, out of the whole number of debentures for the time
being outstanding, debentures of the specified nominal
amount.

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10 Cap. 74:04 General Local loan
Notice of
debentures
drawn for
redemption.
Payment of
drawn
debentures.

Interest to cease
to accrue as
from date
appointed for
payment of
principal.

Redeemed
debentures to
be cancelled.
[13 of 1965]
Expenses of
redemption to
be borne by
sinking fund.
Renewal of
fixed-date
(4) One of the officers specified in, or
appointed under subsection (3) shall thereupon declare the
distinguishing numbers of the debentures drawn for
redemption and the Accountant General shall, as soon as may
be by notice published in the Gazette and in at least one local
newspaper, specify those numbers and appoint a date not
being later as to each debenture than the date on which the
then current half-year’s interest thereon is payable on which
the principal moneys represented by the debentures so
distinguished will be repaid.
(5) From and after the date appointed under
subsection (4) the Accountant General shall, on demand being
made at the Treasury, pay to the holders of the debentures
drawn for repayment the principal moneys represented by
those debentures with all interest payable thereon up to the
appointed date.
20. From and after the date appointed for the
repayment of any debenture, whether a fixed-date or a
drawing debenture, all interest on the principal moneys
represented thereby shall cease and determine whether
payment of the principal shall have been demanded or not.
21. (1) Upon the repayment of the principal moneys
represented by any debenture, such debenture, together with
all the coupons thereunto belonging, shall be delivered up to
the Accountant General to be by him cancelled and retained.
(2) Any drawing debenture redeemed by purchase
shall be cancelled and retained as aforesaid.
22. All expenses of, or incidental to, the redemption
of the debentures and the costs and expenses of all notices
required to be published by this Act may be paid out of the
sinking fund.
23. (1) In this section and sections 24, 25 and 26 “the
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debentures and
issue of fixed-
date deben-
tures in lieu of
interest falling
due on fixed-
date debentures.
[13 of 1984]
c. 85.02
Bank” means the Bank of Guyana established by section 3 of
the Bank of Guyana Act.
(2) If the Bank is directed by the Minister so to do
in respect of any series of fixed-date debentures, the Bank
shall, on an application made therefor to the Bank by any
person holding a fixed-date debenture of that series
(hereafter in this subsection and subsection (3) referred to as
the original debenture), within a period of three months
before the fixed date declared for its redemption or within a
period of one month after that date, and the production of the
original debenture to the Bank, issue to that person a fixed-
date debenture or fixed-date debentures for the whole or
any part of the principal moneys represented by the
original debenture.
(3) The date of issue of any fixed-date debentures
issued under subsection (2) shall be the fixed date declared
under section 7 (a) as the date for the redemption of the
original debenture.
(4) If the Bank is directed by the Minister so to
do with reference to any series of fixed-date debentures, the
Bank shall, on an application made therefor to the Bank by
any person holding a fixed- date debenture of that series
(hereafter in this subsection referred to as the original
debenture), within a period of three months before any date
specified therein under section 15 as a date on which the half-
yearly interest upon the principal moneys represented by
the original debenture shall be paid, and the production of
the original debenture to the Bank, issue to the holder of the
original debenture, fixed-date debenture or fixed-date
debentures for the whole or any part of the interest payable
on the aforesaid date upon the principal moneys represented
by the original debenture.
(5) The date of issue of any fixed-date debenture
issued under subsection (4) shall be the date on which the
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Issue of fixed-
date debentures
in lieu of
amounts
payable on
equated annuity
debentures.
[13 of 1984]
interest, in lieu of which it is being issued, is payable under
section 15.
(6) The fixed date declared as the date for the
redemption of a fixed-date debenture issued under subsection
(2) or (4) shall not be later than five years from the date of
issue of the debenture.

(7) Subject to the provisions of this section and
section 26, the other provisions of this Act in relation to fixed-
date debentures shall mutatis mutandis apply in relation to a
fixed-date debenture issued under subsection (2) or (4).
24. (1) If the Bank is directed by the Minister so to do
in respect of any series of equated annuity debentures, the
Bank shall, on an application made therefor to the Bank by
any person holding an equated annuity debenture of that
series, within a period of three months before any date fixed
for making any of the half-yearly or annual payments, as the
case may be, towards the redemption of that debenture or
within a period of one month after the aforesaid date, and the
production of the equated annuity debenture to the Bank,
issue to that person a fixed-date debenture or fixed-date
debentures for the whole or any part of the amount of the
half-yearly or annual payment payable on that date.
(2) The date of issue of any fixed-date debenture
issued under subsection (1) for the whole or any part of the
amount of any half- yearly or annual payment towards the
redemption of an equated annuity debenture shall be the
date fixed for making the half-yearly or annual payment.
(3) The fixed date declared as the date for the
redemption of a fixed-date debenture issued under the
subsection (1) shall not be later than five years from the date
of issue of the debenture.
(4) Subject to the provisions of this section and
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Issue of fixed-
date debentures
in lieu of
Treasury Bills.
[13 of 1984]
c. 73:01
section 26, the other provisions of this Act in relation to fixed-
date debentures shall mutatis mutandis apply in relation to a
fixed-date debenture issued under subsection (1).
25. (1) If the Bank is directed by the Minister so to do
in respect of any issue of Treasury Bills, the Bank shall on an
application made therefor to the Bank by any person holding
a Treasury Bill of that issue, within a period of fourteen days
before the time or any time (if there are more times than one)
determined under section 21 (3) of the Financial
Administration and Audit Act for the payment thereof,
and the production of the Treasury Bill to the Bank, issue to
that person a fixed-date debenture or fixed-date debentures
for the whole or any part of the principal moneys represented
by the Treasury Bill as have not become payable before the
date on which the application is made and the interest, if any,
which has accrued due thereon up to the time referred to
above.
(2) The date of issue of any fixed-date debenture
issued under subsection (1) for the whole or any part of the
principal moneys represented by a Treasury Bill and the
accrued interest, if any, shall be—
(a) where there is only one date
determined under section 21 (3) of the
Financial Administration and Audit
Act for the payment of the Treasury
Bill, that date;
(b) where there are more dates than one
determined under that section for the
payment of the Treasury Bill, the date
(from among such dates coming after
the date on which the application for
the issue of fixed-date debenture
under subsection (1) is made) which is
nearest to the date on which the
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14 Cap. 74:04 General Local loan

Interest
payable upon
fixed-date
debentures
issued
under
sections 23,
24, 25.
[13 of 1984]
application is made.
(3) The fixed date declared as the date for the
redemption of a fixed-date debenture issued under subsection
(1) shall not be later than five years from the date of issue of
the debenture.
(4) Subject of the provisions of this section and
section 26, the other provisions of this Act in relation to fixed-
date debentures shall mutatis mutandis apply in relation to a
fixed-date debenture issued under subsection (1).
(5) The provisions of this section shall have effect
notwithstanding anything contained in section 21 of the
Financial Administration and Audit Act.
26. (1) Interest shall be payable upon the principal
moneys represented by fixed-date debentures issued under
sections 23, 24 and 25 at such rate as may be fixed by the
Minister from time to time, such rate being not lower than
the bank rate prevailing on the date immediately
preceding the date on which the Minister fixes it.
(2) The rate of interest fixed by the Minister under
subsection (1) shall be notified in the Gazette.
(3) The interest payable upon the principal moneys
represented by any fixed-date debentures issued under
section 23, 24 or 25 shall be computed half-yearly (the first
half-year commencing on the date of issue of that debenture)
in accordance with the rate of interest fixed by the Minister
under subsection (1) and relevant for the half-year and the
interest so computed shall be compounded with the principal
moneys represented by that debenture for the purpose of
computing future interest payable to the holder of the
debenture.
L.R.O. 1/2012
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General Local Loan Cap. 74:04 15
L.R.O. 1/2012
c. 85:02

Issue of fixed-
date debenture
under section
23, 24 or 25 to
be deemed to
be repayment
of principal for
certain
purposes.
[13 of 1984]
c. 73:01
(4) The aggregate of the interest payable under this
section upon the principal moneys represented by any fixed-
date debenture issued under section 23, 24 or 25, and upon
the interest compounded with such moneys under subsection
(3), shall be paid to the holder of the fixed-date debenture,
along with the principal moneys represented by the
debenture, on the redemption of the debenture.
(5) In this section “bank rate” means the rate of
interest determined and announced by the Bank under
section 39 of the Bank of Guyana Act as the rate of interest it
will charge for granting loans or advances to banks under
section 38 of that Act.
27. For the purposes of section 20 (1), or section 21 (6)
of the Financial Administration and Audit Act, and for those
purposes only, the issue of any fixed-date debenture under
section 23, 24 or 25 shall, to the extent of the principal moneys
represented by such fixed-date debenture, be deemed to be
repayment of the principal moneys represented by the
debenture, or the Treasury Bill, as the case may be, in lieu of
which the fixed-date debenture is issued.
__________________

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