PMC Bank crisis impact: Odisha govt cautions departments against depositing money in banks

The Odisha Finance Secretary has written the letter to departments asking them to keep in mind the norm that in the eventuality of closure of any bank the deposits are insured only up to Rs 1 lakh and not beyond that, said reports.

FP Staff October 25, 2019 14:04:53 IST
PMC Bank crisis impact: Odisha govt cautions departments against depositing money in banks
  • A letter titled, Precaution to be taken when depositing government funds in banks, was sent on 22 October to all departments by Principal Secretary of Finance Department AKK Meena,

  • The Finance Secretary has written the letter to departments asking them to keep in mind the norm in the eventuality of closure of any bank

  • According to news reports, the Odisha State government has directed all the departments to take precautions while depositing government funds in any bank.

The Punjab and Maharashtra Co-operative (PMC) Bank crisis impact has ricocheted in Odisha with fears on the safety of deposits in commercial banks.

According to news reports, the Odisha State government has directed all the departments to take precautions while depositing government funds in any bank.

PMC Bank crisis impact Odisha govt cautions departments against depositing money in banks

Representational image. PTI

In a letter titled, Precaution to be taken when depositing government funds in banks, sent on 22 October to all departments by Principal Secretary of Finance Department AKK Meena,  said that the departments, PSUs or State agencies have to be very careful while keeping deposits in any bank and proper enquiry must be done about the financial health of the concerned bank for making any deposit. “It shall be the personal responsibility of the concerned authority for such deposit,” the letter read.

The Finance Secretary has written the letter to departments asking them to keep in mind the norm that in the eventuality of closure of any bank the deposits are insured only up to Rs 1 lakh and not beyond that, said reports.

“Funds of the Government scheme should be utilised directly from treasury through Integrated Financial Management System without being parked in any bank account,” the letter stated.

Meena’s letter “reiterated that withdrawal of money from the treasury without sufficient grounds (such as immediate need for utilisation…) and depositing the same in bank account shall be construed as a financial irregularity”.

In July this year, the Finance department had empanelled 17 public sector undertaking (PSU) banks, eight private banks, two regional rural banks and one each from small finance bank and cooperative bank for the purpose of doing financial transactions and deposits for State PSUs and State level autonomous societies for 2019-20 financial year, according to The New Indian Express.

Letter sent to department cautioning against deposits in banks

Updated Date:

also read

Economy to start looking up in days ahead, says Nirmala Sitharaman; private banks, financial institutions not facing any liquidity problem
Business

Economy to start looking up in days ahead, says Nirmala Sitharaman; private banks, financial institutions not facing any liquidity problem

Nirmala Sitharaman said that she had not heard of any liquidity problem after meeting with private banks, MFs, NBFCs and small finance banks

PMC Bank crisis: Union minister Anurag Thakur says govt will ensure people do not face problem
Business

PMC Bank crisis: Union minister Anurag Thakur says govt will ensure people do not face problem

A day after the RBI slapped restrictions on Punjab & Maharashtra Co-operative Bank (PMC Bank) citing regulatory lapses, Union minister Anurag Singh Thakur on Wednesday said the government will ensure that customers of the bank do not face any problem

Reserve Bank of India changes daily reporting system in cooperative banks after PMC Bank crisis
Business

Reserve Bank of India changes daily reporting system in cooperative banks after PMC Bank crisis

The RBI had put regulatory restrictions on PMC Bank after finding irregularities, and misreporting of loans given to real estate developer HDIL