In a significant policy reversal, the Government of Odisha has reinstated HDFC Bank, ICICI Bank, and Axis Bank to its list of empanelled banks eligible to handle business and deposits of state government organisations.
This decision follows a high-level meeting between the Chief Minister of Odisha and top management representatives of the three banks on July 1, 2025.
Earlier, on June 21, the Finance Department had removed these banks, citing unsatisfactory performance under government flagship schemes and weak general banking parameters such as Priority Sector Lending and Credit-Deposit (CD) Ratio. The move drew attention across the financial sector and raised concerns over the banks’ operational standing in the state.
However, in their meeting with the Chief Minister—who also holds the Finance portfolio—the banks provided written assurances of improvement. They committed to bolstering their participation in government schemes and enhancing their overall banking performance in the state.
“Based on their commitment, the government has decided to withdraw its earlier order,” stated the Finance Department on July 5. As a result, HDFC, ICICI, and Axis Bank will continue their operations as empanelled banks for managing state-related financial transactions.
The order also clarified that any decisions already implemented by government organisations—such as account closures or withdrawals—based on the June 21 directive will remain unchanged.
This development marks a pivotal moment in the state’s financial engagement strategy, signalling both accountability and openness to reform. The banks now face the challenge of following through on their promises to regain full operational confidence within the public sector ecosystem.
