Thiruvananthapuram: The Chief Minister's Office has sought an explanation from the Finance Department regarding its circular asking local self-government bodies to park their own funds in the Special Treasury Savings Bank (STSB).
Sources indicated that the Department of Local Self-Government, too, has sought an explanation on the circumstances under which the circular was issued.
The Finance Ministry, in a circular issued on September 18, asked local self-government bodies to deposit their own funds with the STSB instead of other banks. Though the circular had pointed out that funds could be withdrawn from STSB without any restrictions, elected representatives of local bodies and senior officials felt it impractical.
The circular, issued without any discussions, had come as a surprise to local self-government bodies. The self-government bodies were allowed to park their own funds in banks by the then UDF government in 2011.
The own funds comprise building tax, labour tax, rentals from buildings, etc. of the 941 panchayats, 87 municipalities and six corporations in the State. The local-bodies use their own funds to meet their daily expenses.
