Haryana govt to stay away from private banks

MUMBAI: The Haryana govt has tightened rules governing the handling of public funds and banking relationships, issuing revised instructions to departments on Feb 18, 2026.


In an order issued by the additional chief secretary, the finance department laid down fresh conditions for opening bank accounts, managing deposits and ensuring stricter oversight.


Under the new norms, administrative secretaries can approve opening of accounts for govt schemes only in nationalised banks operating in the state. Opening accounts in corporate or private sector banks will now require prior approval from the finance department.


The govt said any proposal to open an account with a private bank must carry detailed justification, explain why a nationalised bank cannot be used and provide full particulars of the scheme concerned. Accounts opened without following the prescribed procedure will be treated as irregular and will face immediate closure.


The finance department has also de-empanelled IDFC First Bank and AU Small Finance Bank for all state govt business with immediate effect. It directed that no govt funds be parked, deposited, invested or transacted through these two banks.


All departments, boards and public sector undertakings have been asked to immediately transfer balances and close existing accounts with the two lenders.


On fund management, the govt instructed departments to place surplus funds in flexible or fixed deposits offering the highest available interest rates, instead of leaving them idle in low-yield savings accounts.


It has mandated monthly reconciliation of all fixed deposit and bank accounts to detect discrepancies. Any serious deviation or non-compliance by banks with deposit instructions must be reported to the finance department without delay.


The govt set March 31, 2026 as the deadline for completing reconciliation of all accounts. A certified compliance report must be submitted to the finance department by April 4, 2026.


Administrative secretaries, heads of departments and chief executives of boards and PSUs have been made personally responsible for strict adherence to the directions. The order warned that failure to comply will invite administrative and financial action under applicable rules.