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For short term deposits up to 90 days, while the banks offer interest in the range of 3 to 4.5 per cent, treasuries are said to be offering rates up to 5.4 per cent.
THIRUVANANTHAPURAM: The Finance Department of Kerala has warned the heads of public sector undertakings (PSUs) and autonomous institutions against parking their funds with financial institutions that offer lesser remunerative rates.
It’s true that the Government has issued instructions to public sector undertakings (PSUs)/Autonomous Bodies and State owned/sponsored Agencies to deposit their own funds either in treasury or in any scheduled bank according to their choice.
But the Government has noticed that many PSUs and Autonomous Institutions park a huge amount of their funds with banks that offer lower rates than the treasuries offer.
While admitting the right of the institutions to derive maximum benefit from their own deposits, the government believes the funds thus parked being public money, such investment should fetch maximum return.
“It is therefore directed that all PSUs, Autonomous Bodies, State owned entities, state-sponsored agencies shall make fixed deposits in State Treasury using their own funds or profits if the rate of interest in treasury is higher than the other available options,” a Department of Finance circular has stated.
In this context, the Finance Department has made it clear that these institutions shall be held personally responsible for the losses if any on account of action taken in contravention to the government directives.
For short term deposits up to 90 days, while the banks offer interest in the range of 3 to 4.5 per cent, treasuries are said to be offering rates up to 5.4 per cent.
According to sources, more than the differential in rates offered by banks and treasuries on short-term deposits, the government may be pushing the entities controlled by the government to park their funds with treasuries.
“With access to funds lying with treasuries, the government can tide over the temporary financial crisis, using these funds,” added sources.
Last week, the state government has managed to get the consent from the Central government to borrow additional Rs2,000 crore from the fourth quarter quota through the open market auction route.
