A report by the Accountant General’s (AG) office has pulled up the University of Calicut for incurring losses to the tune of over ₹5 crore by depositing money from its own fund in fixed deposits of the State Bank of India (SBI), instead of government treasury accounts.
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The report said that 47 fixed deposit accounts of the university were found in the SBI. The interest rates given, however, were less than that of the government treasury accounts. These deposits matured during 2019-20 and 2020-21. The losses incurred are estimated to be ₹5.32 crore.
According to Section 45(2) in Chapter 7 of the Calicut University Act, 1975, all money in the university fund should be lodged in the government treasury or with the approval of the government, in the SBI or its subsidiaries up to such limits as may be fixed by the government. Through a circular issued on January 6, 2012, the government had directed public sector undertakings and autonomous institutions to deposit their own funds or profits with banks only if they fetch more interest than in treasury fixed deposits. Otherwise such funds should be deposited only in treasuries.
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The government had also made it clear that the chief executive officers of these institutions shall be personally held responsible for the losses on account of parking funds in deposits offering lower interest rates. It was noticed that the SBI had credited a lower amount than the offered rate of interest too. This led to short crediting of ₹78.4 lakh than the agreed amount.
Varsity’s reply
The university replied that it was the liquidity of deposits in SBI, compared with that of the government treasury, which forced the university to lodge the funds there as the withdrawal of money would be easy. It was also claimed that high-yielding deposits in treasury accounts might not be useful during periods of treasury ban. It would create a crisis in the disbursal of salary and pension if there was a delay in the grant-in-aid from the non-plan grant of the government. It was also said that the problem of lower-yielding deposits at SBI has been brought before the Syndicate, which decided to invest 75% of the university’s own fund in treasury and the rest in SBI. This decision had been implemented since April 9, 2021, the university added.
The AG, however, found the reply to be untenable as the practice of having fixed deposits at a lower interest rate compared with the government treasury account still continued in the university.