Palike to junk 875 of its bank accounts, retain just 25

All accounts in Canara Bank; move aimed to streamline finances

To streamline its finances, the BBMP has taken a major decision to do away with its 900 bank accounts and retain only 25 of them. These 25 accounts will be operated from a single bank.

While the large number of bank accounts had made it difficult for BBMP to assess its financial status on a day-to-day basis, it had also given room for embezzlement and irregularities.

The Special Commissioner of the BBMP (Finance) Kumar Pushkar told Deccan Herald that the Palike will have these 25 accounts in Canara Bank. These 25 bank accounts will be for 25 different account heads and for each department of the Palike.

These accounts are for property tax, optical fibre cables, commercial licence, advertisement tax, road repairs, town planning, market rent, birth and death certificates, school admission fee, penalty, earnest money deposits, betterment fee and other receipts. The joint commissioners of the eight zones have been asked to withdraw money from various banks and deposit it in these 25 accounts.

Also, the Palike will not accept hand-written receipts and entertain only those which come online. All the joint commissioners have been told that hand-written receipts will be dishonoured.

IFMS introduced
The Palike has introduced the Inter Finance Management System (IFMS), through which receipts and payments will be made. This system has come into force from October 3.
In the past, the 900 accounts used to be current account, for which it never got any interest. But now, they will be savings accounts, which will fetch at least four per cent of interest to the Palike.

Pushkar said, “Barring Rs 5,000 at the end of the day, the entire amount will automatically go into the Fixed Deposit, which will fetch us at least Rs 20 crore as interest.”

After taking over as BBMP Commissioner, G Kumar Naik had ordered inspection of all the works before making payment and stopped payments on the basis of ‘Letter of Credit’.

The Comptroller and Auditor General (CAG) had strongly criticised the financial mismanagement in the BBMP. The CAG had pointed out an increase of 165 per cent in the loans borrowed by the Palike over four years. Besides, the BBMP had increased its financial burden by making certain unnecessary expenditures. The CAG had noted that the Bommanahalli zone alone was operating 62 bank accounts. Many of these accounts were never shown in the accounts book. Though discrepancies were found in cheques pertaining to Rs 5.42 crore, the records were never rectified, the report stated.