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Chandigarh, February 23, 2026 — The Haryana government has barred two private sector banks from handling state government accounts following an administrative review of their performance and compliance with treasury norms. The decision, issued through an official order of the state’s finance department, directs all departments, boards, corporations, and state-run institutions to refrain from routing transactions through the identified banks until further notice.
Officials explained that the move was precautionary, aimed at safeguarding public funds and ensuring strict adherence to treasury guidelines. Departments have been instructed to immediately shift operational accounts and future transactions to empanelled public sector banks and other approved financial institutions. A compliance report has been sought from all administrative secretaries to confirm that no government funds remain parked with the barred banks beyond the stipulated timeframe.
Investigations and Preliminary Findings
According to officials familiar with the matter, preliminary inquiries revealed discrepancies in certain government-linked accounts at a Chandigarh branch. While the full extent of the issue is under forensic audit, early estimates suggest irregularities involving significant sums. Authorities have clarified that these findings remain under investigation, and further action will depend on the outcome of the audit and the response from the concerned banks.
In addition, officials noted systemic lapses in how surplus funds were managed. Some banks allegedly failed to follow instructions regarding placement of deposits, retaining money in low-interest accounts instead of higher-yield instruments. This practice, under review, may have caused avoidable losses to the state exchequer.
Strengthening Fiscal Discipline
The finance department has emphasized that the decision does not affect individual customers of the banks and applies strictly to government accounts. As part of broader fiscal reforms, new directives mandate that nationalized banks be prioritized for state operations. Any proposal to open accounts with private sector lenders will now require explicit approval from the finance department.
Departments have been given until March 31, 2026, to complete a full audit and reconciliation of their holdings. A formal compliance report is due in early April to ensure that all public money has been safely transitioned and that new oversight measures are fully operational.
Key Facts Summary
- Action Taken: Haryana government bars two private sector banks from handling state accounts.
- Reason: Compliance concerns and preliminary discrepancies under forensic audit.
- Scope: Applies only to government accounts, not individual customers.
- Policy Shift: Nationalized banks prioritized; private bank use requires special approval.
- Deadline: March 31, 2026, for reconciliation and transition of funds.
