Govt issues clarification on de-empanelment of 3 banks

Bhubaneswar, : The Odisha government on Tuesday issued a clarification regarding removal of three major private sector banks – HDFC Bank, ICICI Bank and Axis Bank- from its empanelled list for handling the State funds over poor performance.
The notification issued by the Finance Department stated that this directive is not applicable in case of SNA bank accounts, payment aggregator/payment gateway bank
accounts, agency bank accounts (for collection of state government dues) and NPS/Pension trustee bank accounts currently maintained in these banks. “While the abovementioned bank accounts of state government organisations shall continue in these three banks, new accounts for these purposes shall not be opened in these three banks till further order,” it added. On Saturday, the three leading private banks were
removed from the empanelled list due to continued poor performance in some flagship government schemes and unsatisfactory general banking parameters over the last two financial years. All state government departments, directorates, heads of departments (HoDs), agencies, public sector undertakings (PSUs), societies, and universities were asked to immediately close all savings, current or other running accounts maintained with these banks and transfer the balances to accounts in other empanelled banks without  delay.However, fixed or term deposits in these banks were to be left untouched
and shifted with accrued interest to other empanelled banks upon maturity.They have been instructed to transfer the balances to accounts in other empanelled banks without delay. The letter, however, clarified that existing fixed or term deposits in these banks need not be closed prematurely,as doing so could lead to a loss of interest. Instead, these deposits should be shifted to other empanelled banks upon maturity, along with accrued
interest, it stated.The departments were warned that any non-compliance will be viewed seriously. The Finance department has also asked all  administrative departments to ensure wide circulation of the directive among all state government-supported entities
under their control and compliance.

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