In the wake of major banking scams involving government deposits, the Haryana Finance Department has barred the renewal of fixed deposits (FDs) in the same bank and directed departments to shift funds to other empanelled banks after maturity.
The fresh instructions were issued on May 18 to all Administrative Secretaries and Heads of Departments following the submission of a report by a high-level committee headed by Arun Gupta, Principal Secretary to the Chief Minister and Additional Chief Secretary, Finance Department.
The move comes after the exposure of the Rs 645-crore IDFC First Bank and AU Small Finance Bank scam and the Rs 150-crore Kotak Mahindra Bank scam.
Under the revised policy, funds on maturity will have to be placed in another empanelled bank “even if the rate of interest offered is marginally lower”. Senior Finance Department officials described the shifting of FDs after maturity as the “biggest learning” from the Kotak Mahindra Bank fraud.
According to the FIR registered by the State Vigilance and Anti-Corruption Bureau (SV&ACB) on March 24, the Municipal Corporation, Panchkula, had maintained 16 FDs worth Rs 145.03 crore with Kotak Mahindra Bank’s Sector 11 branch. Their maturity value had risen to Rs 158.02 crore.
Of these, 11 FDs worth Rs 59.58 crore matured on February 16. When MC officials approached the bank, they allegedly received statements that did not tally either with one another or with the Corporation’s records, raising suspicion of large-scale irregularities. Investigators suspect the scam had been continuing since 2018.
The Finance Department has now laid down a detailed procedure for FD investments. Quotations will be invited from all empanelled banks with a minimum notice period of three working days. Comparative statements will be prepared by the senior-most Accounts Officer, while the final approval will rest with the Head of Office.
Departments have also been advised against premature withdrawal of treasury funds for parking in banks. The instructions further prohibit placement of funds in savings or current accounts except with prior written approval of the Finance Department.
The state has withdrawn the empanelment of Federal Bank, IDBI Bank and DCB Bank, while IDFC First Bank, AU Small Finance Bank and Kotak Mahindra Bank will continue to remain de-empanelled.
The department has also fixed investment caps for small finance banks, limiting deposits to Rs 25 crore in select institutions and Rs 50 crore in Bandhan Bank.
