(i) The Sponsoring body shall establish a permanent Endowment Fund of at least rupees five crores.
(ii) The Endowment Fund shall be used as security deposit to ensure that the University complies with the provisions of this Act and functions as per provisions of this Act, the Statutes and the Ordinances. The Government shall have the power to forfeit part or whole of the Endowment Fund in case the University or the sponsoring body contravenes the provisions of this Act, the Statutes, the Ordinances, the regulations or the rules made thereunder.
(iii) The University may utilize the income from Endowment Fund for the development of infrastructure of the University and not for meeting the recurring expenditure of the University.
(iv) The amount of Endowment Fund shall be invested in such instruments as the Government may prescribe and kept invested until the dissolution of the University.
(v) In case of investment in long term security, the certificates of the securities shall be kept in the safe custody of the Government and in case of deposit in the interest bearing Personal Deposit account in the Government Treasury, deposit shall be made with the condition that the amount shall not be withdrawn without the permission of the Government.