BHUBANESWAR: The Odisha government has developed a new fund management mechanism for ensuring visibility of real-time fund balance of schemes, reducing idle cash outside the treasury and optimising the borrowing costs besides avoiding problems of parking funds in banks.
The just-in-time funding solution will promote real-time drawal of funds directly from the consolidated fund of the state government and end-to-end smart payment by using online facility of integrated fund management system (IFMS).
Although Odisha has one of the most advanced treasury management systems in the country, challenges of manual processing of bills, idle parking of funds and float in the system persist and that often lead to sub-optimal utilisation of funds. The solution will ensure that the money owed by the state’s implementing agencies to the end beneficiary or the payee in a public project is paid directly from the state’s treasury in real or near real-time.
A Finance department official said, “As part of the system, funds are drawn just in time through an automated process to avoid any float or parking. The new functionality will eliminate the existing practice of idle cash balance pertaining to scheme funds being accumulated in the bank accounts without earning any market-relevant returns.”
The new mechanism will reduce time as the grantee institutions as well as the scheme implementing agencies can prepare and submit the e-payment request for real-time processing of fund requests for disbursement through the automated platform of system to system exchange of payment requests.