Overdraft haunts Manipur government, employees to suffer
Story highlights
Chief Minister N Biren Singh has put on hold all the appointments
The Manipur government is facing an acute financial crisis. At the root of this crisis is the Reserve Bank of India (RBI) which monitors and controls the banking system in India.
The crisis stems from an order of the RBI to stop all kinds of payments to the Manipur government since it has withdrawn more than the approved amount of overdraft cash.
The overdraft cash is a kind of arrangement made by state governments with the Centre where they can withdraw certain amount of cash. The Manipur government is reportedly facing overdraft of nearly Rs 300 crore.
Most of the state governments are usually in deficit and they keep borrowing from Centre. So, a mechanism of overdraft has been created by the Centre to help state governments financially.
A letter by RBI assistant general manager Anita Kumari to State Bank of India has asked all the payments to Manipur government to be stopped (bills and cheques).
As a result of this order, Chief Minister N Biren Singh has put on hold all the appointments and is meeting his Cabinet ministers and bank officials to find a way to deal with the crisis.
The salaries of government employees in Manipur will also be affected due to this.