Wednesday 24 Jul 2024

Axis Bank mandate is unfair on schools

| JULY 04, 2024, 09:32 PM IST

The proposal to credit salaries of teaching and non-teaching staff of aided schools through a private entity — Axis Bank has been revived with the  Directorate of Education asking schools to comply with formalities to open bank accounts with the lone designated bank. In a circular addressed to managers of these schools, secondary and higher-secondary schools last month-end, Director of Education Shailesh Zingde pointed out many are yet to open the accounts while directing them to do so “at the earliest”.

If we may recall, the Education Department’s move to Axis Bank last year evoked widespread criticism with questions being raised over choosing a private player over Public Sector banks. The argument was why the department was forcing a particular bank on school managements. The issue figured in the monsoon session of the Legislative Assembly last year forcing the government to retract and keep the proposal in cold storage for some time.

Chief Minister Pramod Sawant had contended that Axis Bank offered better financial management facilities and provided their software free of cost. That could be an advantage to the Education Department, but at what cost? Schools could seamlessly change accounts in metros or bigger cities with a network or cluster of banks — both private and public sectors operating in tandem. In Goa, the school network spans remote villages where schools have to make do with the nearest possible branch for convenience, overlooking everything else, including interest rates and other facilities. These schools don’t have a choice.

Axis Bank, despite being one of the leading private sector banks does not have much presence in Goa, especially in villages, let alone remote areas. Schools will have to break the ongoing relationship with existing banks and start all over again, whether they like it or not. Agreed that the government may have some understanding with Axis Bank and may have even bargained for facilities, but it must weigh in the ground situation.

Interestingly, directives on opening Axis Bank accounts have stoked controversy in Maharashtra too, although not in the education sector. In 2019, petitions were filed before the Enforcement Directorate and the Nagpur Bench of the Bombay High Court accusing the then Maharashtra chief minister Devendra Fadnavis of misusing his position and directing the State’s 2-lakh police force to shift their salary accounts to Axis Bank. The directives on Axis Bank accounts have been linked to Fadnavis’s wife who is a vice-president of the bank.

A major difference between the Goa circular and the one in Maharashtra was that the switch was completely voluntary in the neighbouring State and there was no compulsion to open accounts with Axis Bank. Moreover, the policemen were explained the features and benefits the bank was offering at the time of announcing the decision. The point of contention, however, was that Axis Bank was handpicked and was not roped in through a formal process.

There are some 570 government-aided educational institutions which receive salary grants, which means all these will have to open accounts with Axis Bank. Whichever way the Education Department sees this decision, schools would find it challenging to adjust to this change, especially those who do not have easy access to Axis Bank. The department should have followed a democratic process by offering options and explaining the exclusivity to Axis Bank.


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