Haryana Government Implements Stricter Banking Rules for Public Funds Management
The Haryana government has significantly tightened regulations governing the handling of public funds and banking relationships, issuing comprehensive revised instructions to all departments on February 18, 2026. In a decisive move aimed at enhancing financial oversight and accountability, the state's finance department has established fresh conditions for opening bank accounts, managing deposits, and ensuring stricter monitoring of government finances.
New Banking Account Regulations
Under the newly implemented norms, administrative secretaries are now authorized to approve the opening of accounts for government schemes exclusively in nationalized banks operating within the state. This represents a substantial shift in policy, as opening accounts in corporate or private sector banks will now require prior explicit approval from the finance department itself.
The government has specified that any proposal to open an account with a private bank must include a detailed justification, a clear explanation of why a nationalized bank cannot be utilized, and complete particulars of the concerned scheme. Accounts opened without following this prescribed procedure will be treated as irregular and will face immediate closure, demonstrating the administration's commitment to procedural compliance.
De-empanelment of Private Banks
In a significant development, the finance department has de-empanelled IDFC First Bank and AU Small Finance Bank from all state government business with immediate effect. The department has issued a directive that no government funds should be parked, deposited, invested, or transacted through these two financial institutions.
All departments, boards, and public sector undertakings have been instructed to immediately transfer balances and close existing accounts with these two lenders. This move underscores the government's preference for nationalized banking partners and its determination to centralize financial operations.
Enhanced Fund Management Protocols
Regarding fund management, the government has instructed departments to place surplus funds in flexible or fixed deposits offering the highest available interest rates, rather than leaving them idle in low-yield savings accounts. This strategic approach aims to maximize returns on public money while maintaining liquidity.
The administration has mandated monthly reconciliation of all fixed deposit and bank accounts to promptly detect any discrepancies. Any serious deviation or non-compliance by banks with deposit instructions must be reported to the finance department without delay, ensuring continuous oversight.
Strict Compliance Deadlines and Accountability
The government has set March 31, 2026, as the definitive deadline for completing reconciliation of all accounts. A certified compliance report must be submitted to the finance department by April 4, 2026, creating a clear timeline for implementation.
Administrative secretaries, heads of departments, and chief executives of boards and PSUs have been made personally responsible for strict adherence to these directions. The order explicitly warns that failure to comply will invite administrative and financial action under applicable rules, emphasizing individual accountability in the financial management process.
These comprehensive measures represent a substantial overhaul of Haryana's financial governance framework, designed to enhance transparency, optimize returns on public funds, and strengthen oversight mechanisms across all government operations.
