Add Zee Business as a Preferred Source
Ban on Bank of Baroda lifted within 24 hours by Madhya Pradesh government
The Madhya Pradesh government lifted the ban imposed on Bank of Baroda for handling state government business just 24 hours after it was announced. The decision came following representations made by the bank management, which prompted the government to reconsider the earlier order.
)
The Directorate of Institutional Finance of Madhya Pradesh issued an order imposing restrictions on Bank of Baroda. Image Credit: ANI
Written By: Anubhav Maurya
Updated: Mon, Mar 30, 2026
04:05 PM IST
04:05 PM IST
ZeeBiz WebDesk
The Madhya Pradesh government lifted the ban imposed on Bank of Baroda for handling state government business just 24 hours after it was announced. The decision came following representations made by the bank management, which prompted the government to reconsider the earlier order.
On March 27, 2026, the Directorate of Institutional Finance of Madhya Pradesh issued an order imposing restrictions on Bank of Baroda. The order prohibited the bank from carrying out transactions related to government work and managing state funds.
The decision was reportedly linked to alleged lapses in the management of funds under the Chief Minister Kisan Scheme, where the bank was accused of mishandling around Rs 1,751 crore. The government stated that these irregularities were causing financial and administrative losses to the state.
TRENDING NOW
However, immediately after the ban was enforced, Bank of Baroda submitted a representation to the Directorate of Institutional Finance. The bank management provided explanations and clarifications regarding the concerns raised by the state government. Upon reviewing the representation, the directorate decided to revoke the ban on the bank, effectively lifting the restrictions within 24 hours of their imposition.
Following this decision, the Directorate of Institutional Finance issued official communication to all departments of the state government. Copies of the communication were also sent to all department heads, revenue boards, divisional commissioners, and district collectors across Madhya Pradesh to ensure that the decision was implemented smoothly.
The rapid reversal of the ban has drawn attention, as it highlights both the seriousness with which the state government initially acted and its willingness to respond to clarifications from the bank promptly.
While the initial order had suggested long-term consequences, including a five-year ban, the swift withdrawal of the restrictions indicates that the issues could be resolved administratively without long-term disruption to government operations.
Bank of Baroda plays a significant role in handling government transactions in Madhya Pradesh, including the disbursement of funds for welfare schemes such as the Chief Minister Kisan Scheme. Any disruption in the bank’s operations could have impacted the timely delivery of financial assistance to farmers and other beneficiaries. The lifting of the ban ensures that government operations can continue without interruption.
The state government has emphasised that while the ban has been lifted, it remains committed to strict oversight of financial transactions, particularly in schemes involving large sums of public money. Officials stated that mechanisms will be strengthened to prevent any financial mismanagement in the future.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
Anubhav Maurya
Anubhav Maurya
RECOMMENDED STORIES
)
)
)
)
)
)
)
)
)
)
)
)
)
RELATED NEWS
Borrowers see limited relief despite RBI’s aggressive rate cuts in FY26, says report
FD Rates in May 2026: SBI, PNB, other major lenders pay these returns in 1, 3, 5 years now—Learn with examples
India’s retail inflation remains subdued at 0.4% in Q3 FY26, says BOB
Bank of Baroda to cut MCLR by 0.05% from December 12; overnight, 3-month tenures to get cheaper — borrowers to see marginal relief
India's inflation likely eased to 0.4–0.6% in October amid softer food and commodity prices
