Odisha govt cautions state departments against depositing money in banks, issues clarification after RBI letter
The impact of the crisis in Punjab and Maharashtra Co-operative (PMC) Bank is also being seen in Odisha with the state government asking its departments to take precautions while depositing government funds in any bank.
In a letter, the state finance department asked all departments to be very careful while keeping deposits in any bank. “It shall be the personal responsibility of the concerned authority for such deposit,” the letter, titled “precaution to be taken when depositing government funds in banks”, read.
The letter was written by the Principal Secretary (Finance) AKK Meena.
“Funds of the Government scheme should be utilised directly from the treasury through Integrated Financial Management System without being parked in any bank account,” the letter stated.
This irked the Reserve Bank of India which shot a letter to state Chief Secretary against issuing such directive saying these steps help spread rumour and may create a risk to the financial system.
Following the RBI letter, the Odisha government issued a clarification saying that it does not have any view on the fiscal health of any particular bank.
“It is to be clarified that the State government does not have any view on the fiscal health of any particular bank. That comes under the domain of the RBI. There is no reason for anyone to get apprehensive about the financial health of the banks in general," Principal Secretary (Finance) said in the letter to all departments.
The letter clarified that the purpose of the earlier directive was to put the government money in state treasury as putting the funds in banks is a loss for the state.
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