Deposits Diversion From Banks To APSFSC?

APSFSC Jagan
Jagan

All In the wake of the uproar witnessed with regard to diversion of fixed deposits worth Rs 400 crore of the NTR Health University to the government treasury, the Andhra Pradesh government has asked all the department heads not to deposit money in any bank in the state but in the newly-formed AP State Financial Services Corporation (APSFSC), run by the government.

However, the government cited a different reason for this move. It reminded about the involvement of bankers in the misappropriation of Rs 14.6 crore belonging to the AP Cooperative Oil Seed Growers’ Federation and AP Warehousing Corporation using fake documents last month. Over 14 people, including bankers, were arrested in connection with this case. Even universities were asked to comply with the rule of depositing money in APSFSC.

However, temple committees and trust boards, including the TTD, have been exempted from the restriction.

In April 2020, under the Companies Act, the state government secured a non-banking licence from the RBI to float an exclusive corporation to handle the financial matters of the government.

Initially, the executive council of NTR Health University was reluctant to deposit money with the SFSC as its fixed deposits were already held up in the Canara Bank. However, under duress from the state government, the university even had to forego Rs 43 crore of interest money and transfer its deposits to SFSC.

This move led to protests from the employees as they had been waiting for their salaries and other payments.

A senior official in the administration said that the move was aimed at protecting public money but the opposition parties are smelling something fishy in this regard.

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