After the Rs 645 crore IDFC First Bank and AU Small Finance Bank scam, and along the same lines, the Rs 150 crore Kotak Mahindra Bank scam, the Haryana Finance Department has issued instructions that to “ensure periodic reconciliation, renewal of fixed deposits (FDs) in the same bank shall be debarred. Funds upon maturity shall be placed in any other empanelled bank, even if the rate of interest offered is marginally lower.”Fresh instructions were issued on May 18 to all administrative secretaries and heads of departments, following the submission of a report by a high-level committee headed by Arun Gupta, Principal Secretary to the CM and ACS, Finance Department.“Shifting of FDs to other banks after maturity is the biggest learning from the Kotak Mahindra Bank scam,” said a senior officer in the Finance Department.According to the State Vigilance and Anti-Corruption Bureau (SV&ACB)’s FIR dated March 24, in the Kotak Mahindra Bank scam, the Municipal Corporation (MC), Panchkula, was maintaining 16 Fixed Deposits (FDs) with the Kotak Mahindra Bank’s branch in Sector 11, Panchkula. These deposits amounted to Rs 145.03 crore, with a maturity value of Rs 158.02 crore.Of these, 11 FDs worth Rs 59.58 crore matured on February 16. When MC officials approached the bank regarding the matured deposits, they were provided with statements that did not match one another or the Corporation’s records, particularly for the FDs, raising suspicions of large-scale financial irregularities. The scam had continued since 2018, according to SV&ACB.Procedure for fixed deposit investmentsAccording to the fresh instructions, quotations for Fixed Deposits shall be invited from all empanelled banks. A comparative statement shall be prepared by the senior-most Accounts Officer posted, who will make recommendations in accordance with the prescribed guidelines.The proposal shall be approved by the Head of the Office.  A minimum notice period of three working days shall be provided before inviting quotations.Government departments are advised to draw funds from the treasury only at the last hour, when expenditure or payment is due. Premature withdrawal of funds from the treasury and their parking in banks should be avoided by government separtments to the extent possible, said the instructions.It is further instructed that no placement of funds shall be made in savings accounts or current accounts, except where mandated by regulatory requirements and with prior written approval of the Finance Department.The Finance Department has withdrawn the empanelment of Federal Bank, IDBI Bank, and DCB Bank. IDBI First Bank, AU Small Finance Bank and Kotak Mahindra Bank will remain de-empanelled.Limit on investment in small finance banksThe Finance Department has also released a list of 24 empanelled banks, including 12 public sector banks.The upper limit of investment in each Small Finance Bank, Equitas Small Finance Bank, Jana Small Finance Bank, Ujjivan Small Finance Bank and Utkarsh Small Finance Bank, is fixed at Rs 25 crore. In Bandhan Bank, the upper limit by any government department is Rs 50 crore.Instructions dated February 18 will remain in forceIn cases where a Department or Organization proposes to open a bank account in any Corporate or Private Sector Bank, prior approval of the Finance Department (Institutional Finance & Credit Control) shall be mandatory. Such proposals shall be submitted to the Finance Department along with: detailed justification, specific reasons for not opening the account in a nationalized Bank, and full particulars of the proposed account or scheme.