Haryana Government Implements Strict Financial Controls on Bank Accounts
In a decisive move to enhance financial discipline and protect public funds, the Haryana government has announced that all government organizations must now obtain prior approval from the Finance Department before opening any account with corporate or private sector banks. This directive applies universally to all departments, boards, corporations, public sector undertakings (PSUs), universities, and autonomous bodies across the state.
Immediate Closure of Accounts with Two Specific Banks
The government has issued urgent instructions for the immediate transfer of balances and closure of all accounts maintained with IDFC First Bank and AU Small Finance Bank. This action is part of a comprehensive revision of guidelines governing the opening and management of bank accounts by government entities and their affiliated bodies.
The decision follows a significant financial scandal involving Haryana Government accounts, where a Rs 590-crore fraud was uncovered due to alleged collusion between employees of IDFC Bank and external parties. In response, the state has already de-empanelled both IDFC First Bank and AU Small Finance Bank from handling any government business in Haryana with immediate effect.
Strict Financial Prohibitions and Compliance Requirements
According to detailed instructions issued by the additional chief secretary (Finance), no government funds shall henceforth be parked, deposited, invested, or transacted through IDFC First Bank and AU Small Finance Bank until further notice. The communication, marked as 'urgent' and 'time bound,' has been widely circulated to administrative secretaries, heads of departments, deputy commissioners, registrars of universities, divisional commissioners, and all public, private, and small finance banks operating in Haryana.
For any future account openings in private banks, departments must provide:
- Detailed justification for the account
- Specific reasons for not opting for a nationalized bank
- Complete particulars of the proposed account or scheme
Any bank account opened without following this prescribed procedure will be treated as irregular and subject to immediate closure. Heads of Departments and Chief Executives of Boards and Corporations will be held personally responsible for ensuring compliance with these new regulations.
Addressing Irregularities in Fixed Deposit Management
The Finance Department has also highlighted irregularities in how certain banks have handled fixed deposits. In several instances, despite clear instructions to place funds in higher-interest fixed deposit instruments, banks retained the money in savings accounts, resulting in lower returns and financial losses for the government.
To address this, new instructions mandate that:
- Fixed deposits must be made strictly according to approved terms
- Compliance with deposit instructions must be verified regularly
- Fixed deposit and related bank accounts must be reconciled on a monthly basis
- Serious discrepancies must be reported immediately to the Finance Department
Deadlines for Reconciliation and Compliance Reporting
All departments, boards, and corporations have been instructed to complete reconciliation of their bank accounts in accordance with the revised guidelines by March 31, 2026. A compliance report, duly certified by the competent authority, must be submitted to the Finance Department by April 4, 2026.
This sweeping reform represents a significant tightening of financial controls within Haryana's government operations, aimed at preventing future fraud and ensuring optimal management of public funds through enhanced oversight and accountability measures.
