Telangana Government orders Gram Panchayats to open separate bank accounts for own income

The Telangana government has taken significant steps to enable the state's Gram Panchayats to manage their own income independently. The Panchayat Raj Department has instructed all District Panchayat Officers (DPOs) across the state to ensure the process of opening separate zero-balance savings accounts for all Gram Panchayats.

According to a report by The Hindu, this decision follows an amendment made to Section 70(3) of the Telangana Panchayat Raj Act, 2018, via the Telangana Panchayat Raj (Fourth Amendment) Act, 2026. In orders recently issued, the government has declared October 9, 2026, as the date for the implementation of this amendment.

Divya Devaraj, Commissioner of Panchayat Raj and Rural Employment, has directed District Panchayat Officers to assist in opening dedicated accounts for all income and expenditure related to the Own Source of Revenue (OSR) of Gram Panchayats. These accounts will be opened in the name of ‘OSR Account – [Name of Gram Panchayat]’. For this purpose, designated branches of the State Bank of India (SBI) and Union Bank of India (UBI) will be used.

According to the list released by the department, SBI branches have been appointed for 15 districts, including Mahbubnagar, Nagarkurnool, Narayanpet, Sangareddy, Siddipet, Nalgonda, Suryapet, Khammam, Rangareddy, and Vikarabad. On the other hand, UBI branches have been allocated for 16 districts, including districts such as Adilabad, Nirmal, Karimnagar, Nizamabad, Kamareddy, Hanumakonda, Warangal, Mulugu, Jangaon, and Mahabubabad.

The Commissioner stated that banks have already been requested to instruct their branches to open these accounts and complete their configuration on a priority basis. The memorandum explicitly mentions that these accounts will be used solely for income and expenditure under the own source of revenue of the Gram Panchayats.

Under the revised provisions, all funds received by Gram Panchayats, including amounts received under Central and State Government schemes, must now be deposited immediately in the nearest nationalised bank, cooperative bank, or post office as per the prescribed method. Prior to this new rule, Gram Panchayats had to route the amounts received from their own source of revenue through the government treasury.