The bankers in Andhra Pradesh are said to be amazed and worried about the kind of demands that the AP Government is making. They are said to have been shocked at the kind of suggestions that the AP Government advanced. The Government wanted the banks to deposit money as matching grants so that the Centre can give its share.

Highly placed sources tracking the financial behaviour of the YSRCP government revealed that the Jagan Government held an important meeting with the bankers. During the meeting, the government told them that the Central Government’s welfare grants totalling Rs 15000 crore a year would be given only when the state government deposits Rs 12000 per year as matching grants in dedicated accounts meant for the specific schemes. Since the State Government did not have adequate revenues, it wanted the banks to deposit the amount as overdraft and then take it back once the Centre deposits its share of money.

This is unacceptable to the banks as it amounts to financial irregularity. The bank officials have reportedly rejected the proposal outright. Sources say that the Central government has brought this new procedure to check diversion of funds. It has reportedly found that the Jagan government was diverting the funds given for specific schemes and was not even releasing the mandatory matching grant. To check this, the Centre said that it would release its share of the funds only after AP deposits the matching grants. Accordingly, the Centre will deposit Rs 30000 crore for two years, only after the AP Government deposits Rs 24000 crore.  It also wanted the login details and passwords for cross verification. Unable to pay the amount, the state government is now said to be forcing the banks to deposit that amount on AP Government’s behalf.