In a move aimed at strengthening financial oversight, the Finance Ministry has directed public sector banks (PSBs) to enhance scrutiny and reinforce safeguards for government accounts following concerns over fraudulent activities.
The directive comes in the wake of investigations into a significant fraud case involving government-linked accounts in Haryana. Banks have been asked to review existing procedures, identify operational gaps, and strengthen controls related to account management and communication records.
Officials familiar with the development said PSBs have also been advised to implement stricter standard operating procedures (SOPs) for branches handling government transactions and bolster security measures to minimise the risk of future fraud.
The move follows ongoing investigations into an alleged ₹590 crore fraud connected to government accounts maintained at an IDFC First Bank branch in Chandigarh. The case has led to increased scrutiny of governance and monitoring practices surrounding government banking operations.
Sources indicate that public sector banks have acknowledged the ministry’s guidance and are expected to further strengthen transaction monitoring frameworks. While several banks already have systems in place to detect suspicious activity, additional safeguards are being evaluated to improve compliance and risk management.
The latest directive underscores the government’s focus on improving accountability, strengthening governance standards, and safeguarding public funds across the banking ecosystem.
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