Aizawl: The Mizoram government on Monday entered into a Memorandum of Understanding (MoU) with eight banks to launch the One Department, One Bank (ODOB) initiative, a move officials said is intended to strengthen oversight, improve transparency and enable more effective monitoring of government funds.
Why ODOB now
The agreement was signed at the Chief Minister’s Conference Hall in Aizawl in the presence of Chief Minister Lalduhoma and Adviser (Finance & Planning) TBC Lalvenchhunga. The chief minister said recurrent observations in Comptroller and Auditor General (CAG) reports pointing to sizeable sums parked in Drawing and Disbursing Officers’ (DDOs) accounts — outside the knowledge of the Finance Department — prompted the decision to adopt a departmental banking model.
“To address such difficulties and enable more effective monitoring of government funds, we have decided to implement the ‘One Department, One Bank’ system,” Lalduhoma said.
The initial rollout will cover eight government departments, with additional departments to be brought under the system progressively, officials said. The participating banks are: State Bank of India, Mizoram Cooperative Apex Bank, Mizoram Rural Bank, Axis Bank, HDFC Bank, ICICI Bank, Union Bank of India and Indian Overseas Bank.
Expected benefits and government aims
Officials described ODOB as a public financial management reform intended to achieve several practical outcomes:
- Centralised visibility of departmental cash balances for the Finance Department.
- Reduction of idle government cash held in DDO accounts, improving utilisation and fiscal discipline.
- Enhanced transactional transparency and streamlined reconciliation between departments and banks.
- Closer banking partnership to support targeted credit growth in the state.
During his remarks, Lalduhoma also highlighted Mizoram’s comparatively low Credit-Deposit (CD) Ratio and set a target for improvement. The state’s CD Ratio stood at 55.83 per cent in 2025-26, he said, compared with higher ratios in neighbouring states.
| State | CD Ratio (2025-26) |
|---|---|
| Mizoram | 55.83% |
| Assam | 73.52% |
| Nagaland | 61.10% |
| Tripura | 61.00% |
The government is aiming to raise Mizoram’s CD Ratio to at least 67 per cent by 2028-29 and urged the banks operating in the state to work jointly towards this objective, Lalduhoma said.
How ODOB will work in practice
Under the ODOB framework, each participating department will designate a single bank as its primary banker. That bank will be the principal point for salary and non-salary payments, receipt of departmental revenues and for maintaining transactional visibility. Officials said the model should facilitate real-time monitoring of departmental cash positions and reduce the proliferation of multiple DDO accounts that can obscure overall fund flows.
While the MoU formalises partnership with eight lenders initially, the state intends to expand the arrangement to more departments as implementation proceeds. Authorities did not list the specific departments included in the initial cohort in the signing announcement.
Banking sector role and next steps
Bank representatives at the event were thanked by the chief minister for partnering on what he described as a “new approach to public financial management.” The banks will be expected to put in place operational arrangements — such as dedicated reconciliations, reporting formats and interfaces with the state treasury — to enable the Finance Department to track and manage funds effectively.
Officials said further operational guidelines and timelines for migration of departmental accounts will be issued by the Finance Department following the MoU. The success of the ODOB model will be measured by improved cash visibility, faster reconciliations and progress towards the CD Ratio target.
Analysts and fiscal managers in other states have used similar departmental banking models to consolidate government balances and improve liquidity management. The Mizoram government’s emphasis on expanding credit flows and raising its CD Ratio signals an intent to leverage the banking system more actively for local development financing.
