Bhubaneswar: In a significant directive aimed at enhancing financial accountability and the efficient delivery of public services, the Odisha government has de-empanelled three prominent private sector banks – HDFC Bank, ICICI Bank, and Axis Bank – from handling its business and deposit transactions.
This decisive action, effective immediately, stems from a review of the banks’ “consistently poor performance” in the implementation of various flagship government schemes over the past two fiscal years, coupled with “discouraging general banking parameters.” Saswat Mishra, Principal Secretary Finance has issued orders in this regard.
The Finance Department’s order mandates all state departments, directorates, public sector undertakings (PSUs), societies, and universities to close their operational accounts with these three banks and transfer the balances to other empanelled banks. While ongoing fixed deposits are exempt and will be allowed to mature before funds are transferred, the message is clear: the state is prioritizing tangible results and proactive participation from its financial partners in its development agenda.
This move underscores the Odisha government’s commitment to aligning its financial ecosystem with its overarching policy goals, particularly those focused on socio-economic development and grassroots impact. The state’s budget for 2025-26, presented by Chief Minister Mohan Charan Majhi, emphasizes key areas such as rural connectivity, urban infrastructure development, and social welfare schemes like the Antyodaya Gruha Yojana, which aims to provide concrete houses to poor families. The success of these initiatives heavily relies on efficient fund disbursement and robust financial mechanisms.
The de-empanelment serves as a stern reminder to all banking institutions operating within the state that their role extends beyond traditional banking services. Active and effective participation in government schemes, including those promoting financial inclusion, agricultural advances, and support for MSMEs and Self-Help Groups (SHGs), will be critical for maintaining their standing with the state government. The decision also highlights the government’s intent to review and potentially reconsider its stance if the affected banks demonstrate substantial improvement within the current financial year.
This development is likely to prompt other banks to critically evaluate their engagement with government initiatives in Odisha and potentially intensify efforts to meet the state’s performance metrics. It signals a shift towards a more performance-driven partnership model, where financial institutions are expected to be active facilitators of the state’s developmental aspirations.