Panaji, Oct 4 (TOI): The state government has directed all departments and corporations to stop issuing cheques and shift to electronic transfers for insurance premiums, loan deductions and other payments on behalf of their employees from October onwards.

The finance department has directed that the directorate of accounts will deduct the amount payable for such third-party transactions from the salary of each employee and then deposit the amount in the respective department’s current account. The department will, in turn, have to electronically transfer the funds to the respective insurance companies, cooperative societies or financial institutions for loan repayment.

All government departments have been asked to open current accounts at the closest branch of the State Bank of India. These accounts will not have any cash and cheque withdrawal facilities.

Currently, each department deducts amounts for insurance premiums, loan repayment, deposits towards recurring deposits and cooperative societies from the employee’s salary. While salary is credited electronically, the deducted amount is paid through cheques, which the state government now wants to do away with.

“The directorate of accounts shall electronically transfer the consolidated amount towards all “third party payments” to the particular current account of the department after the salary of the employees has been released,” the department of finance said in a circular to all heads of departments.

Each department is required to maintain a record of the amounts deducted and paid through electronic mode on behalf of each employee.

“The amount being credited to the said current account by the directorate of accounts shall be disbursed to all the third parties electronically latest by the 10th of the subsequent month,” the circular said.