BENGALURU: The state government has issued an order banning government departments, public institutes and local authorities from opening new bank accounts.
This follows a report submitted by the Karnataka State Audit and Accounts Department (KSA&AD) on the misuse of funds and fraud in maintaining bank accounts by various departments and public institutes starting from gram panchayats to universities. This was also pointed out in a CAG audit report.
In case a department wishes to open a new bank account, then it is must take the permission of the competent authority.
The copy of the order which is available with Express reads, “No bank account will be opened and operated by government departments (including field offices), local bodies or authorities, including urban local bodies, Panchayat Raj institutions, boards and corporations, societies, universities and other state autonomous bodies without the express sanction of the competent authority.”
New bank accounts will be permitted by the competent authority only after ascertaining the existing system of fund disbursal is incapable of meeting specific requirements of the department or organisation.
Speaking to Express, a senior official from the state finance department said, “Opening of new bank accounts with the purpose of diverting and parking funds, to avail loans and to avoid lapsing of funds, is henceforth, strictly prohibited.”
The official said only sweep-in-sweep-out deposit accounts must be considered for operation of funds in banks. For all other kinds of bank accounts (savings/current accounts), further sanction of the administrative department in the form of a government order is mandatory.
According to officials from the department, this decision was taken after scams in a few departments.
In the Rural Development and Panchayat Raj (RDPR) department, crores of rupees released for drinking water project were deposited in benami/proxy accounts, enquiries show.