Verification of ESIC Funds Collected Through SBI and Certification Regarding Non-Retention of ESIC Monies

No. 23/13/Confirmation Payment/2024/A/cs. I 04.06.2024

Subject: Verification of ESIC Funds Collected Through SBI and Certification Regarding Non-Retention of ESIC Monies.

1. All Regional Directors, R.O.
2. All Dy. Director (Fin.), R.O./S.R.O./E.S.I.C. Hospital
3. Director (Finance), (Hqrs.), E.S.I.C.
4. All D(M)D/D(M)Noida
5. All A.C. & R.D. (In-charge), E.S.I.C.
6. Director, E.S.I.C. Hospital - E.S.I.C.

It has come to the notice of Headquarters that, prior to the introduction of the online payment system, employers were depositing ESI contributions through offline challans at designated branches of State Bank of India (SBI). During the examination of certain cases, it has been observed that although the amounts were collected from employers by SBI, the corresponding funds were not transferred to the ESIC account in some instances and were instead retained by the Bank for prolonged periods.

The matter was examined at Headquarters and it was found that certain amounts collected on behalf of ESIC had been parked by SBI through Inter Office Instruments (IOIs) and/or other intermediary, suspense, transit, parking or similar accounts maintained by the Bank.

In view of the above, all Accounting Units are hereby directed to take the following action on priority:

Part A: Obtaining Certification from SBI

All Accounting Units shall immediately take up the matter with the respective State Bank of India branches/controlling offices where ESIC maintained designated base branches/collection account/account no 1 and obtain a certificate from the competent authority of SBI confirming that:

1. No amount belonging to ESIC, collected towards contribution, interest, damages or any other dues, is presently lying unremitted in any base branches/collection account/account no 1 maintained for ESIC;

2. No amount belonging to ESIC is lying in any parking account, suspense account, intermediary account, transit account, Inter Office Instrument (IOI), reconciliation account, sundry account or any other account, instrument or arrangement created or operated by SBI for the purpose of collection, processing, reconciliation, transfer or accounting of ESIC receipts;

3. All amounts collected by SBI on behalf of ESIC have been duly accounted for and transferred to the designated ESIC accounts and that no unadjusted or unidentified balance pertaining to ESIC remains with the Bank in any form whatsoever.

The certificate obtained from SBI shall be forwarded to Headquarters along with a detailed report of the action taken.

Part B: Examination of New Cases Reported by Employers

In cases where any employer represents that payment towards ESI contribution, interest, damages or any other dues had been duly debited from its bank account through authorized mode, but the amount is not reflected in ESIC records and consequential defaulter/recovery action has been initiated by ESIC, the concerned Accounting Unit shall immediately undertake verification of the matter.

For this purpose, the Accounting Unit shall depute an officer/official to personally visit the concerned SBI branch and conduct a detailed examination of the relevant records in coordination with the Bank. The examination shall specifically ascertain whether any amount pertaining to ESIC is lying in any base branch account, collection account, account no 1, parking account, suspense account, transit account, IOI, reconciliation account, sundry account or any other account, instrument or mechanism maintained by SBI for collection, processing or transfer of ESIC receipts.

The findings of such examination, together with all supporting documents and certificate as aforesaid in para A, shall be forwarded to Headquarters immediately for further examination and appropriate action.

It may further be conveyed to SBI that if any amount belonging to ESIC is subsequently found to have been retained, parked, withheld or otherwise not remitted to ESIC, the Corporation shall be at liberty to initiate appropriate legal and administrative proceedings against the Bank, including recovery of the amount along with applicable penal interest and any other action as deemed fit under law.

This may be treated as a matter of utmost priority. A compliance report regarding Part A shall be furnished to Headquarters within 15 days from the date of issue of this communication.

This issues with the approval of the Competent Authority.

(Signed) (Sanjeev Kumar) Insurance Commissioner (Fin.)