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Punjab de-panels HDFC Bank over delays in fund transfers, cuts all official ties

Govt circular says amid bank's repeated delays in executing official transactions, it has become difficult to maintain any financial relationship with HDFC Bank

Reported by:  PTC News Desk  Edited by:  Jasleen Kaur -- June 11th 2025 05:58 PM
Punjab de-panels HDFC Bank over delays in fund transfers, cuts all official ties

Punjab de-panels HDFC Bank over delays in fund transfers, cuts all official ties

PTC Web Desk: In a significant move, the Punjab Government has officially de-paneled HDFC Bank and severed all financial and institutional ties with it. The decision was taken after the bank reportedly failed to transfer allocated funds to various departments within the stipulated timelines, thereby disrupting the state’s financial operations.

The Finance Department of Punjab took serious note of the issue and issued a formal directive to all department secretaries, directors, Panchayat officers, development authorities, boards, and corporations. The communication highlighted HDFC Bank’s non-compliance with timely implementation of government-issued financial instructions, which the government deemed as non-cooperative behaviour affecting fiscal efficiency.


“In view of the bank's repeated delays in executing official transactions, it has become difficult to maintain any financial relationship with HDFC Bank,” the government circular stated. “Hence, the bank has been de-paneled, and no further government transactions are to be carried out through it," it added.

The de-paneling comes shortly after a directive was issued to various state departments to return unutilised funds that had been earlier allocated. It was revealed that departments holding accounts with HDFC Bank were unable to promptly deposit these funds back into the state treasury, leading to further complications.

A high-level meeting chaired by the Chief Secretary was held on June 5 to address the state’s financial strain and formulate corrective actions. One of the outcomes was a decision to recall unspent funds from all departments, especially those parked with HDFC Bank, due to concerns over delayed remittances.


Following the decision, the Finance Department has issued a list of banks authorised to carry out government transactions. These include: Public Sector Banks: State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, UCO Bank, Bank of Maharashtra, Punjab & Sind Bank.

Private and Cooperative Banks: ICICI Bank, Axis Bank, IDBI Bank, Kotak Mahindra Bank, Yes Bank, IndusInd Bank, Federal Bank, Capital Small Finance Bank, AU Small Finance Bank, and Punjab State Cooperative Bank.

Regional Rural Banks: Punjab Gramin Bank.

Central Bank of India is also on the approved list.

These banks have been directed to ensure full cooperation and adherence to government financial protocols.

Fiscal strain in Punjab

This development comes amid growing financial challenges for the Punjab Government. Earlier this year, the Central Government imposed a Rs 16,000 crore reduction in the state's borrowing limit. Consequently, Punjab was forced to borrow Rs 48,000 crore in the current fiscal year, of which Rs 24,000 crore was allocated just to service past debt.

A significant portion of this borrowing goes toward repayment of principal amounts of previous loans, leaving limited fiscal space for fresh development initiatives. In light of this, the finance department has taken stringent measures to ensure liquidity and better fund management across departments.

- PTC NEWS

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