Section 89: Modes of borrowing

89. Modes of borrowing (1) Subject to this section, a Municipal City Council, Municipal Town Council or District Council may borrow money— (a) on the security of its revenues or other property, movable or immovable, or on any part thereof by mortgage or otherwise; or (b) with the approval of the Minister, by way of debentures or bonds issued under this section. (2) Any loan referred to in subsection (1) (b) shall be effected by means of an issue of debentures or bonds created, issued, transferred, dealt with and redeemed in such manner as may be specified in regulations made by the Municipal City Council, Municipal Town Council or District Council. (3) Any regulations referred to in subsection (2) shall provide— (a) for the discharge of any loan raised by means of debentures; and (b) for the payment of interest on money secured by debentures or bonds. (4) A Municipal City Council, Municipal Town Council or District Council may borrow, by way of temporary loan or overdraft from a bank or any other similar institution, any sum not exceeding 10 million rupees or such other sum as may prescribed by the Minister, which it may temporarily require for the purpose of defraying— (a) expenses pending the receipt of revenues receivable by it in respect of the period of account in which these expenses are L18 – 55 [Issue 4] Local Government Act chargeable and taken into account in the estimates made by the Municipal City Council, Municipal Town Council or District Council for that period; or (b) expenses, pending the raising of a loan which it has been authorised to raise, intended to be defrayed by means of the loan.