Odisha Govt Reinstates HDFC, ICICI, Axis Banks for State Transactions

Bhubaneswar: In a significant policy reversal, the Odisha government has withdrawn its earlier decision to de-empanel three major private sector banks—HDFC Bank, ICICI Bank, and Axis Bank—from handling business and deposits of state government departments and affiliated organizations.

A fresh notification issued by the Finance Department on Friday confirmed that the three banks will now continue as empanelled institutions eligible to manage financial transactions and deposits of government bodies, including departments, directorates, public sector undertakings, and universities.

The decision comes nearly two weeks after the same department, on June 21, had de-empanelled the trio citing consistent underperformance in key government schemes and unsatisfactory general banking service metrics. At the time, all state government departments were directed to immediately close their accounts with the three banks and shift balances to other empanelled banks.

However, the situation changed following a meeting between top executives of HDFC, ICICI, and Axis Bank with Chief Minister Mohan Charan Majhi in Bhubaneswar. During the meeting, the banks reportedly submitted written assurances to improve their participation in government schemes and enhance priority sector lending efforts.

The reinstatement is seen as a pragmatic step by the state government, aimed at maintaining banking flexibility while encouraging improved performance by private sector players in public service delivery.