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After Punjab, Odisha Government has banned some private banks from handling government business. On Saturday, the Odisha Government made an important decision. It has stopped using the services of three major private banks — HDFC Bank, ICICI Bank, and Axis Bank — for handling government related business.
But why has Odisha Government has banned HDFC, ICICI, Axis Bank? This has been done due to persisting poor performance in some flagship government schemes over last two FYs, coupled with discouraging general banking parameters.
The Finance Department of Odisha released an official notification. It clearly said that the above-mentioned three banks are removed with immediate effect from the list of banks that are allowed to:
- Handle government funds
- Manage deposits
- Work with State Government departments, and
- Support organisations linked to the government
Also Read: Big Fraud in SBI Kaithal: Rs 1.92 Crore Transferred from Customers Accounts Without Permission
All the below government-linked bodies in Odisha have been instructed to follow the order.
- State Government departments
- Government directorates
- Heads of departments (HoDs)
- Government establishments
- Government-supported agencies
- Public Sector Undertakings (PSUs)
- Government societies
- Government-funded universities
All these organisations have been instructed not to conduct business with HDFC, ICICI, or Axis Bank. The notification also gave a clear instruction to these organisations. All these above mentioned organisations have been directed to immediately close their Savings Bank/ Current/ other running accounts maintained in these three banks and transfer the account balance to any new/ existing account opened or maintained in any other empanelled bank.
However, Fixed Deposits/Term Deposits, etc. currently maintained in these three banks shall not be closed now as it may lead to loss of interest due to pre-mature closure. But, on maturity of these deposits, the entire deposit along with accrued interest shall be transferred to other empanelled banks.
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