Odisha Government Terminates HDFC, ICICI, Axis Bank From Government Business

The government of Odisha has decided to drop HDFC Bank, ICICI Bank, and Axis Bank from its list of approved banks that conduct government business. What this implies is that the private banks will no longer receive government money, payments, or transactions pertaining to state schemes.

As per a government order, the step was taken because of the "persisting poor performance" of these banks in managing government business, particularly in key welfare and developmental schemes during the last two financial years.

What It Means for Depositors

If you are a beneficiary under a government scheme and your funds are deposited in any of these three banks, you might have to shift your money soon. The state has directed all its departments, local bodies, and associated agencies to close savings and current accounts in these banks.

Any fixed deposits already present will run their course until maturity. Then the money will be transferred to banks which are still sanctioned by the government. The respective departments will advise depositors as to how to go about making any changes.

Borrowers Too, May Witness Some Changes

If you have availed a loan under a government-linked scheme from any one of these banks, the existing terms of your loan will probably stay unchanged. However, from now on, fresh loans or subsidies under state-sponsored schemes will not be sanctioned by HDFC Bank, ICICI Bank, or Axis Bank. You can be asked to do business with other banks if you seek new assistance under government schemes.

Departments to Switch to Other Banks

The finance department of the Odisha state government has asked all government units to transfer their accounts to public sector or cooperative banks that remain on the authorised list. This move is expected to improve the implementation and monitoring of schemes as the government believes that the current three banks have not met expectations in service delivery.

The decision also signals a shift towards better performance-based partnerships between the state and financial institutions.

What You Should Do

If you are associated with a state scheme—either as a beneficiary, borrower, or depositor—you should look out for any official notice. Banks or government offices are likely to start approaching soon with details on how accounts need to be shifted or payments must be taken.

It's also a good idea to inquire with your local bank branch or government office if you are not sure about your status.