Days after a letter from Odisha’s Finance Department to all other government departments advised “precautions” while depositing government funds in banks citing apprehensions in the wake of “adverse” newspaper reports on fiscal health, another letter was issued on Friday, stating the state government “does not have any view” on the matter. The first letter had reminded all departments that “each depositor in a bank is insured up to maximum of Rs 1 lakh for both principal and interest amount”, should there be a scenario of liquidation, license cancellation, amalgamation, merger or reconstruction. “It may be noted that funds for state government schemes should be utilised directly from the Treasury through the IFMS (Integrated Financial Management System) without being parked in any bank account … withdrawal of money from Treasury without sufficient grounds (such as immediate need for utilisation, matching share of Central Sector Schemes) and depositing the same in bank account shall be construed as financial irregularity”, the first letter from Principal Secretary (Finance) Ashok Meena stated. “It shall be the personal responsibility of the concerned authority for such deposit”, the letter addressed to all department heads, such as principal secretaries and commissioner-cum-secretaries, warned.The communication raised eyebrows among bureaucrats, bankers and depositors Friday. Some department heads told The Indian Express that the letter is shifting responsibility from the Finance Department, which is supposed to empanel banks after due process. For 2019-20, the state government empanelled 17 PSU banks, eight private sector banks, one small finance bank, two regional rural banks and one cooperative bank to handle business and deposits of the state government. A high-ranking source in the State Level Bankers Committee told The Indian Express that a delegation met the Director of Institutional Finance in the state and was assured that the first letter would be “clarified”. “The state government does not have any view on the fiscal health of any particular bank. That comes under the domain of the Reserve Bank of India”, the second letter stated on Friday, adding the first letter “was only meant to avoid opening of new accounts … shifting of government funds without any reason from one bank to another”.
