On June 21, the Orissa government removed three private banks HDFC Bank, ICICI Bank, and Axis Bank from its list of empanelled banks over poor performance in government schemes and general banking services over the last two years. Orissa government has cut ties with these three banks and will no longer be allowed to manage the money and accounts of the state government or any government-supported organizations.
An official order has been sent to told all its departments, offices, public companies, and universities to close their accounts in these three banks immediately and to other banks that are still approved (empanelled) by the Odisha government. These three private banks can’t be used anymore by the state government, its departments, agencies, universities, PSUs (public sector units), or any other related offices.
However, if any money is kept in fixed deposits (FDs) or term deposits in these banks, those do not need to be closed right now, because closing them early could mean losing interest. But once those deposits mature, the full amount along with the interest earned must be moved to another approved bank.
Copy of an official order issued by Orissa government.
The government has warned that anyone who doesn’t follow this order will face serious consequences. They also told all departments to make sure this message reaches all organizations under them. This decision was officially announced by the Finance Department of Odisha on Saturday.