Haryana Finance Minister

Chandigarh, March 16 :

Haryana Finance Minister, Capt. Abhimanyu has announced the new State Policy on interface with banks keeping in view the changing scenario of the banking sector. All existing bank accounts opened need to be consolidated into one or two major accounts by March 31, 2018 definitely with the approval of Finance department. Till then, banking with the existing banks will be continued subject to the revised policy.

Capt Abhimanyu said that the revised policy has been formulated for dealing with banks by various government organizations so as to obtain optimum benefit of the schemes, minimize cost and bring uniformity and transparency in dealing with financial institution.
He said that as per guidelines formulated for placing of deposits and borrowing up to Rs ten crore for short-term period up to three months, the organisations might invite quote from the respective empanelled banks through mails. The quote should be given within 24 hours of the issuance of mail. It should be ensured that the quotations should not be called a day before any holiday.

He said that the quotations received should be short-listed and the bank providing maximum rate of interest be selected for placing deposit or minimum rate of interest for borrowing/loan. A decision will be taken by the competent authority within two days of the receipt of the quotation from the bank. The details of the deposits and borrowings placed will be sent immediately through mail at [email protected] with a hard copy of the same.

The total deposits placed and the borrowing made by different organisations during a period of one month will be consolidated by Finance Department in the Department of Institutional Finance and Credit Control (IFCC) for the information of the Government by the 3rd day of the subsequent month indicating the name of the Bank and amount deposited/borrowed.

He said that any organization who wants to place deposit of any amount for a period of more than 3 months or more than Rs. 10 crore for 3 months or less will send the proposal to IFCC at least 10 working days in advance, so that a consolidated proposal can be prepared for all the organizations for placing their deposits with the banks chosen, in the similar manner of deposits and borrowing up to Rs ten crore for short term period up to three months as above, to maximize and optimize returns on the same day. The proposal needs to be sent either on 1st or 15th day of every month.

He said that as funds are usually borrowed from banks and financial Institutions on State Government guarantee, a similar procedure for taking credit as in case of deposits would be followed and the organizations in need of credit will send their proposal to IFCC at least 15 days in advance so that cheap credit could be tapped from different sources and provided for in a time-bound manner. The bank which offers minimal rate for extending borrowing/loan would be recommended. No organization would open a bank account for any scheme what so ever without the approval from IFCC.

He said that all existing bank accounts opened need to be consolidated into one or two major accounts, for which approval of IFCC is to be invariably taken. No Government Department can draw money to keep it in the bank account without it being actually utilized for the purpose for which it has been withdrawn.

He said that in case any organization withdraws money and the money remains idle and, unless specifically permitted, action will be initiated. In case, due to any reason, the amount drawn remains unutilized, then the organization has to deposit the same along with the interest for the period for which it remained unutilized at the MCLR rate prevailing for the bank in which the deposit had been kept and for the period it remained idle. If the Government funds are transferred to organizations other than the Government Departments from the State Budget, then the funds need to be utilized immediately. Unutilized funds, unless specifically permitted, will have to be deposited back with interest to be charged.

In case any Government Departments/Organizations fails to deposit the amount within the stipulated time and it is subsequently known to have been kept idle in any bank account, penal interest at the rate of 2 percent for which the amount remained idle will be deducted in future releases to those Departments and Organizations. No Organization should withdraw funds to keep them idle in any bank account without specific approval.

Prior approval of IFCC for signing any MOU with any Financial Institutions/E-wallet Companies etc. will invariably be required to be taken, in the absence of which all cases of financial assistance to that organization would be put to halt. All the organizations will ensure that the payments and receipts are made through digital mode. The performance of the banks would be reviewed afresh and thereafter, every six months, on the basis of new parameters. Banks, whose performance is not found to be satisfactory, would stand de-empanelled alter review.

It would also be mandatory for the banks to provide Information within a specified period to the IFCC for review and in case of non-submission of data for two consequent periods; they would be de-empanelled, without any show-cause notice. It needs to be ensured by the banks that the data provided to IFCC is not at variance with that reported to SLBC for various government schemes.

Every empanelled bank would also be required to nominate one senior level functionary as Nodal officer. NIC in consultation with IFCC will design a portal to enable the organizations to furnish online information to facilitate monitoring of financial transactions/dealing on real time basis. The portal is likely to be operational by April 1, 2018. Every organization will appoint a nodal officer for uploading the duly authenticated data on the portal.

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