De-empanelment of Axis, HDFC, ICICI banks in Odisha: Know accounts exempted from closure

In light of widespread confusion over its recent decision to de-empanel three private sector banks, HDFC Bank, ICICI Bank, and Axis Bank, from state financial operations, the Odisha government has issued a detailed clarification to avoid disruption in key services.

The Finance Department, in a fresh notification, stated that its directive to close government accounts in the said banks will not be applicable to specific categories. 

Exempted Accounts:

These include Single Nodal Agency (SNA) accounts, payment aggregator or payment gateway accounts, agency bank accounts responsible for collecting state government dues, and NPS/pension trustee accounts currently maintained in these banks.

Reason for De-empanelment:

The clarification comes days after the government, on June 21, ordered the closure of all current, savings, and running accounts maintained by departments, directorates, PSUs, societies, and universities in the three private banks. The decision was taken citing their underperformance in flagship government schemes and weak compliance with general banking norms.

While exempting certain account types from closure, the government made it clear that no new accounts of these categories shall be opened in the de-empanelled banks until further orders.

Additionally, the Finance Department clarified that the directive does not apply to existing fixed and term deposits. Departments have been instructed to allow these deposits to mature and then shift the funds to empanelled banks.

The state government's move aims to enhance transparency, strengthen financial discipline, and ensure smoother implementation of welfare programmes while minimizing operational disruptions in critical financial services.