Government employees asked to close all accounts in HDFC Bank, here’s why

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Government employees asked to close all accounts in HDFC Bank, here’s why

Punjab government’s water resources department has asked its employees including chief engineers, executive engineers and superintending engineers to close their accounts in HDFC bank. As per a memo from the principal secretary for water resources, the bank “never cooperates” when the department “needs their support.”

According to the office memo, it is written, “It has been brought to the notice by certain Executive Engineers (Drainage-cum- District Mining Officers) that the HDFC Bank had issued certain bank guarantees to the mining contractors. These mining contractors have made default in making payment to the state government and when the Executive Engineers (Drainage-cum- District Mining Officers) approach the bank to encash the bank guarantee, HDFC Bank for one reason or the other is not encashing these bank guarantees.”

The memo from the principal secretary for water resources was published on August 22, 2022. The copy has been sent to the principal secretary of finance, who has been asked to urge all departments to terminate their accounts with HDFC Bank. All administrative secretaries have received the memo.

As a result, it has been decided, in agreement with the directive, that no bank accounts would be maintained at HDFC Bank. Employees whose salary accounts with HDFC Bank are open have been urged to shut them in light of the department’s greater interests. It has been requested of the employees to open a salary account with any other bank of their choosing.

Issuing a clarification on the matter, HDFC Bank said: “HDFC Bank is committed to honour all its payment obligations as per the terms of bank guarantees issued by the Bank. With respect to the matter pertaining to bank guarantees issued on behalf of mining contractors also, Bank has at all times promptly honoured all its payment obligations till date. We wish to clarify that in one specific case, HDFC Bank had been informed of a Court Order restraining the beneficiary from taking any action against the applicant with respect to demands for payments. Since the matter is sub-judice, Bank was constrained to place the invocation on hold temporarily until further clarification and direction from the Hon’ble Court in this regard. The Bank is committed to conducting business in compliance with all the applicable laws and regulations.”

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