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

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. [caption id=“attachment_7404161” align=“alignleft” width=“380”]  Representational image. PTI[/caption] 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.