Bhubaneswar, October 25 (LocalWire): Apprehensive of the ailing fiscal health of banks, the state government has asked its officials to be extra-cautious while depositing government money in any of the banking institutions.
In a letter sent to all government departments, the Finance Department principal secretary AK Meena has called for “precaution to be taken when depositing funds in the banks”.
“The government departments, Public Sector Undertakings (PSUs) have to be very careful while keeping deposits in any bank, proper inquiry about the financial health of the concerned bank for making any deposit. It shall be the personal responsibility of the concerned authorities for such deposits,” the official communication stated.
The state has empanelled 17 nationalised banks and eight private sector banks, besides a bank in the cooperative sector for handling business and deposits of public sector undertakings and state-level autonomous societies for 2019-20.
However, adverse reports are coming in regarding the fiscal health of some of these banks and apprehension is being raised regarding the safety of the deposits in some of these banks, the letter stated.
It may be noted that depositor in a bank are insured only up to Rs one lakh for both principal and interest amount held by them as in the date of liquidation or cancellation of bank license or the date on which the scheme of amalgamation, merger, reconstruction comes into force under deposit insurance and credit guarantee corporation of India Limited, a subsidiary of Reserve Bank of India.
Therefore, in the eventuality of the closure of any bank, the depositors can claim only up to Rs one lakh and not beyond that.