Govt payments over 25k through bank accounts only

"As part of the government's commitment to good  governance and elimination of corruption, the Ministry of
Finance has amended the rules to enable all the Ministries and Departments to facilitate payments by direct credit to the bank accounts of the payees," an official statement said.

Controller General of Accounts (CGA) has issued orders stating that from April 1, 2012, all payments above Rs 25,000 to suppliers, contractors, grantee and loanee institutions will be directly credited to their bank accounts, it added.

"The measure is expected to streamline the process of making payment by government departments while minimising the interface of the payees with government offices to receive their dues," the Finance Ministry statement said.

While the government servants would continue to have the option to receive their salaries by cash or cheques, they could also opt to receive their salaries in bank accounts.

The release also said that all other payments to government servants of above Rs 25,000 would be credited
directly to bank accounts.

"Further, all payments towards the settlement of retirement/ terminal benefits of the government servants shall
also be directly credited to their bank accounts," it added.

Finance Minister Pranab Mukherjee had recently inaugurated a 'Government e-payment gateway' for central civil
ministries and departments for payment to bank accounts.
 

The Controller General of Defence Accounts (CGDA) would also be progressively using this e-payment gateway.