Rs 1,125 crores of Maha civic bodies stuck in Yes Bank

For the second time in recent weeks, the Maharashtra government has sought details of the funds lying with various private sector banks following the Yes Bank imbroglio that erupted on Thursday night, official sources said here on Saturday.

The state has asked various civic bodies, state public sector undertakings, autonomous bodies and other government departments on their exposure to the Yes Bank, and full details of their funds/deposits/salary accounts/etc., lying with other private sector banks.

The development came in the wake of Chief Minister Uddhav Thackeray’s directives on Friday to avoid parking state government funds in private sector banks henceforth and only use the services of public sector banks.

The state’s move came even as at least three major civic bodies have admitted that their deposits of around Rs 1,125 crore are stuck in the beleaguered Yes Bank.

The Pimpri-Chinchwad Municipal Corporation (PCMC), Nashik Municipal Corporation (NMC) and Nashik Municipal Smart City Development Corporation Ltd. (NMSCDCL) admitted to total deposits worth Rs 800 crore and Rs 310 and Rs 15 crore, respectively in the Yes Bank.

PCMC Municipal Commissioner Shravan Hardikar informed the media that it had reduced its deposits in Yes Bank from Rs 1,100 crore to Rs 800 and also has deposits worth Rs 4,000 crore in other banks.

To a query, Hardikar said that the PCMC preferred to keep its money in banks which offered the highest rates of interest, and the decision was taken after inviting bids in which Yes Bank offered maximum rates for swipe-in/swipe-out and other facilities.

“After the Reserve Bank of India restrictions were announced from Friday we have routed online transfers and cash collections through the principal banker, Bank of Baroda, and there is no cause for worry,” Hardikar said.

However, the adjoining Pune Municipal Corporation had already withdrawn its deposits from Yes Bank a month ago when initial restrictions were put on withdrawals, according to the Shiv Sena.

The NMC and NMSCDCL are also alarmed as their funds totalling to Rs 325 crore are stuck in the Yes Bank, but officials are confident that it won’t impact the civic bodies’ operations in the short-run.

Last December, Mumbai Mayor Kishori Pednekar had said the Municipal Corporation of Greater Mumbai would consider shifting some of its accounts from a private sector bank to the safer option of the PSBs as a precautionary measure.

Similarly, the state government is likely to initiate steps to move its police department accounts with the Axis Bank to a PSB after the Yes Bank imbroglio, an official said.

Lauding the state move to shift all funds to PSBs, Vasantrao Naik Sheti Swavlamban Mission President Kishore Tiwari said there have been many instances of “unethical practices” by officials when big ticket accounts were moved from PSBs to private sector banks on grounds of higher interest or better service.

“This is the outcome. I am writing to the CM to shift all government accounts not only from private sector banks, but also from the cooperative banks, many of which are in a critical financial health owing to the grip of local politicians and officials on their functioning,” Tiwari said.-IANS/  Quaid Najmi