The Odisha government has taken a significant decision to remove three major private sector banks – HDFC Bank, ICICI Bank, and Axis Bank – from its list of empanelled banks. This move comes after the banks failed to meet the government’s expectations in terms of performance in flagship government schemes and general banking parameters over the last two financial years. The Finance department, led by principal secretary Saswata Mishra, has issued a directive to all state government departments, public sector undertakings, and other entities to close all accounts with these three banks and transfer the balances to other empanelled banks.
The decision was taken after a review of the banks’ performance, which was found to be unsatisfactory. The government has warned that any non-compliance with the directive will be taken seriously. The banks that have been removed from the list will no longer be able to provide banking services to the state government and its entities. However, the government has clarified that existing fixed or term deposits with these banks do not need to be closed immediately, but they will have to be transferred to other empanelled banks when they mature.
The Odisha government has a list of empanelled banks that are authorized to provide banking services to the government and its entities. The list is reviewed regularly to ensure that the banks are performing well and meeting the government’s expectations. The removal of HDFC Bank, ICICI Bank, and Axis Bank from the list is a significant development, as these banks are among the largest private sector banks in the country. The decision is expected to have a significant impact on the banking sector in Odisha and may lead to other state governments reviewing their relationships with these banks.
The government has asked all administrative departments to ensure that the directive is widely circulated among all state government-supported entities under their control. The departments have been instructed to take immediate action to close all accounts with the three banks and transfer the balances to other empanelled banks. The decision is expected to lead to a shift in the banking landscape in Odisha, with other banks likely to benefit from the removal of HDFC Bank, ICICI Bank, and Axis Bank from the list of empanelled banks.