RBI bans payments of Manipur government

Correspondent IMPHAL, Jun 12 | Publish Date: 6/12/2019 12:24:54 PM IST

Manipur government on Wednesday directed all its departments to put on hold any recruitment process as the Reserved Bank of India (RBI) has banned withdrawal of fund from the state government’s account with effect from Wednesday (June 12).

Coinciding with the ban, Manipur government has also banned ongoing recruitment process in all departments including all agencies, societies, undertakings, boards, corporation etc. under various departments.

It may be mentioned that various departments of the state government were conducting recruitments of staffs in their respective departments. 

Interestingly, the recruitment processes resumed recently after remaining suspended for around two months following the implementation of the Model Code of Conduct for the recently concluded 17th Lok Sabha elections.

An office memorandum issued by the department of personnel and administrative reforms (personnel division) of the state government issued on Wednesday notified departments to put on hold any recruitment process currently undertaken by the departments; whether for regular, contractual, casual and adhoc appointments with immediate. 

No recruitment process shall resume/initiated without specific permission or instruction from the department of personnel, the office memorandum added.

RBI assistant general manager Anita Kumari, in letters to bank authorities instructed to cease payments of Manipur government while stating that the government account has overdrawn in excess of the arrangements agreed upon with RBI.

The letter informed the banks to instruct its offices and branches transacting government business for Manipur government to take necessary action to stop payments as per extant procedure.

Though none of the officials of the state finance department was ready to comment on the ban, sources said that the overdraft amount of the state government has crossed the permissible limit.

RBI might have put up the restriction earlier but there were incidences of the state government withdrawing fund in overdraft with the help of the Centre, the sources said. 

On one hand, even though the government hid the financial position of the state, it was reflected in the CAG report, it added.On the other hand, economists of the state hinted that RBI ban could only meant financial crisis in the state. 

If the ban on payments continued with the state government finding means to recover the overdraft, it will affect payment of salaries of its employees. 

Now after the RBI ban has come into effect, no government bill or CDA passed by the state treasury department would be entertained in the banks and it would definitely affect payment of salaries to government employees. 

Transactions of GP fund and bill related with contract works will also be affected as no bill of the state government could be realised by the banks at this point.

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