Establishment of sinking fund

(1) If, in respect of a loan raised by the Board under this Act, the Government so direct, then the Board shall set apart half-yearly out of its income as a sinking fund, a sum sufficient to liquidate the loan within a period which shall not in any case, unless the previous consent of the Government has been obtained, exceed twenty five years; but the maximum period shall not, in any case exceed forty years: Provided that a sinking fund shall not, in the absence of any stipulation to that effect, be established in the case of loans taken by the Board from the Central Government or any State Government. (2) If any sinking fund has, before the appointed day, been established by any authority in respect of a loan raised by it, for which loan, the Board is liable under this Act, the sinking fund so established by that authority shall be deemed to have been established by the Board under this section.