Maharashtra government reduces dependence on private banks

People queue up outside a State Bank of India during the lockdown, where the government has shifted one of its accounts of the National Cyclone Risk Mitigation Projects. Pic/Datta Kumbhar

In a much-awaited decision, the Maha Vikas Aghadi (MVA) government has finally reduced its association with private banks, and roped in nationalised and state-controlled rural and cooperative banks for official transactions, such as investment of excess funds. However, the employees have been allowed to keep their salary and pension accounts in their existing banks because the institutions approved for doing business with the government will not handle these matters.

Objections to a bank
Such a decision was long expected, because the ministers and leaders of MVA parties have been raising objections about a particular private bank, which has been doing business with the government since the Congress-NCP alliance regime between 1999 and 2014. The bank has salary accounts of the police department and several other departments also have ties with it. However, the finance department did not say whether the salary accounts in the private banks, including the controversial one and others, will be closed.

The ruling parties had objected to a particular bank where the wife of one of the opposition leaders works at a senior position. They alleged that the bank was given preference over other private and nationalised banks. In March this year, the government had closed one of its accounts of the National Cyclone Risk Mitigation Projects in this bank and shifted it to state-run SBI. The busting of some private banks was also cited as a reason for opposing them.

The state cabinet passed a resolution on Wednesday, allowing IDBI Bank (in which the Centre and LIC together have 97.46 per cent holding), Maharashtra Regional Gramin Bank and Vidarbha-Konkan Gramin Bank (which are supported by a nationalised bank) and 15 'A grade' district central cooperative banks to work for the government. However, IDBI, gramin banks and district cooperative banks will not have salary and pension accounts, but accept deposits from state-controlled undertakings and corporations.

'To keep govt funds safe'
The district cooperative banks allowed are Mumbai, Thane, Raigad, Ratnagiri, Sangli, Kolhapur, Latur, Akola, Sindhudurg, Ahmednagar, Pune, Satara, Bhandara, Chandrapur and Gadchiroli. These banks are controlled by politicians, especially from the NCP and Congress who feared that the BJP government was out to end their control there. The finance department said the move would ensure safety of the government funds in these professional cooperative banks. The banks that were not included in Wednesday's decision are facing financial problems and undergoing recovery. They will be allowed in future if they upgrade to 'A' class.

Three State HQ staffers die of COVID-19

Two employees at Mantralaya and one from the state legislature are reported to have died due to COVID-19. The staffers were not keeping well for some days, but they also worked in their respective offices, said sources. The two buildings have been put on alert and precautionary measures have been increased, though only 10-16 per cent workforce has been reporting to work.

The ministers said the Fadnavis government had issued a directive barring the officials from attending the meetings convened by the opposition leaders who enjoyed a status of cabinet minister (generally the leaders of opposition in the both houses). They wanted the MVA government to do the same.

'Why do babus attend opposition meetings?'

In the meeting, some ministers wondered why senior government officials were attending the meetings held by the opposition leader and ex-CM Devendra Fadnavis. The leader, accompanied by his legislative council counterpart, Pravin Darekar, has been touring the state to review the pandemic and holding press conferences to lash out at the government. Asking if there was a parallel government functioning, the ministers said the officials happily received the BJP leaders and briefed them, and also accepted their suggestions when they were supposed to take orders from the chief ministers, ministers and their administrative bosses.

The ministers said the Fadnavis government had issued a directive barring the officials from attending the meetings convened by the opposition leaders who enjoyed a status of cabinet minister (generally the leaders of opposition in the both houses). They wanted the MVA government to do the same.

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