RBI asks Punjab govt to clear overdraft

The Reserve Bank of India has asked the Punjab government to settle overdraft of about Rs 800 crore before releasing payment for any other purpose.
"RBI has asked us to first settle the overdraft of Rs 800 crore before releasing funds for any other purpose," a senior official in Punjab Finance Department said today.
The Punjab government was supposed to settle the overdraft by March 27. "But the stipulation of clearing overdraft within 14 days could not be met," the official said adding that it prompted the RBI to alert the government to settle the overdraft.
Besides, the apex bank has also directed banks to stop releasing payments to the state government after the state "failed" to clear the overdraft within the stipulated period.

"On March 29, RBI also asked banks to stop releasing funds to Punjab till the overdraft is cleared," he said.
"We have now Rs 370 crore as uncleared overdraft which will be paid by Monday," the official said.

Asked whether there could be any delay in releasing salary to government employees, the official said that the salary disbursement for month of March will start from April 9-10.
Notably, the Congress-led Punjab government has accused previous SAD-BJP regime of pushing the state into fiscal mess.
The new government has also announced to bring out a white paper on fiscal health of the state.