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The West Bengal Finance Department has sought to end a widespread practice among State Government departments and State-owned corporations to invite competitive bids from banks for parking funds at higher rates.
In a note dated March 15, the Principal Secretary, Department of Finance, has asked State Government offices, corporations and civic bodies to “place their deposits with the bank with which they have a regular course of business”.
According to Government sources, the practice has been found to be “prevalent”.
The note said, “It has been brought to the notice of the Government that the practice of inviting competitive bids for placing term or fixed deposits with banks is prevalent in many State Government departments, directorates, regional and district offices, corporations and other local bodies”.
This leads to frequent transfers of fixed deposit accounts from one bank to the other. Higher interest rate for such bulk deposits compromised the “security” of the money involved, the note said.
In the past few days, “deposits” worth Rs 160 crore by West Bengal Infrastructure Development Finance Corporations and West Bengal State Cooperative Bank with a nationalised bank were allegedly found to be “fake”. Government sources pointed out this could be the handiwork of a racket and just the tip of the iceberg.
The Government move came in the wake of investigations by CBI and the Kolkata Police, the sources said.
> jayanta.mallick@thehindu.co.in
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