(1) Whenever a loan has to be repaid from a sinking fund, the Board shall establish such fund and shall pay into it every year until the loan is repaid, a sum so calculated that if regularly paid throughout the period agreed upon by the Board, it would, with accumulations in the way of compound interest, be sufficient, after payment of all expenses, to pay off the loan at the end of that period.
(2) The rate of interest on the basis of which the sum referred to in sub-section
(1) shall be calculated shall be such as may be prescribed by rules.
Power to discontinue payments into sinking fund.
81. Notwithstanding anything contained in section 80, if at any time the sum standing at credit of the sinking fund established for repayment of any loan is of such amount that if allowed to accumulate at the rate of interest prescribed by rules under sub-section (2) of that section, it will be sufficient to repay the loan at the end of the period agreed upon by the Board, then the Board may discontinue further annual payment into such fund.
Investment of sinking fund
82. All moneys paid into the sinking fund shall, as soon as possible, be invested by the Board in ---
(a) Government securities; or
(b) securities guaranteed by the Government.
Application of sinking fund
83. The sinking fund or any part thereof, shall, from time to time, be applied in or towards the discharge of the loan or any part of the loan for which such sinking fund was established; and until such loan is wholly discharged, it shall not be applied for any other purpose.
123 Annual examination of sinking fund