AP directs PSEs to ensure parking of'idle' funds for higher returns
To provide a level playing field to all FIs, the Government had earlier authorised NBFCs, established by State govt, to participate in fund-raising
image for illustrative purpose
Amaravati: Andhra Pradesh Government has issued detailed guidelines for the Public Sector Entities (PSEs) to park their 'idle' funds judiciously to ensure optimal management.
Finance Department (PMU-F) Principal Secretary Peeyush Kumar vide GO Ms No.71 dated December 29, 2025, said “It is the duty of every government servant not merely to observe complete integrity in financial matters, but also to be constantly watchful to see that the best possible value is obtained for all public funds spent by him or under his control and to guard scrupulously against every kind of wasteful expenditure from public funds”
According to the GO, to provide a level playing field to all FIs, the Government had also earlier authorized Non-Banking Financial Company (NBFCs), established by the State Government, to participate in the process of raising funds and accepting surplus deposits on par with Scheduled Commercial Banks and other FIs.
Thus, to ensure optimal returns on the investment made from public resources, all PSEs have been directed to diligently seek the best possible returns on their investments, allowed as per the applicable norms.
PSEs are directed to proactively explore eligible investment avenues with different financial institutions, including Scheduled Commercial Banks, NBFCs, including those operated by the State Government, to assess and compare prevailing rates of return.
Investments should be strategically reinvested or reallocated, as per the existing norms on this subject matter, to maximise returns and contribute to improved financial management.
The order stated the funds that the departments and the public sector entities manage are public funds and hence, it is not just sufficient to manage with transparency and accountability but also to ensure that these funds obtain best possible value, both qualitatively and quantitatively.
The government, over a period, has established several PSEs-corporations, societies, boards, trusts, Institutions and Special Purpose Vehicles for various social and economic objectives of the State Government. These entities approach various Financial Institutions (FIs) and Scheduled Commercial Banks (SCBs) to avail loans for meeting their requirements of working capital & other investment needs and to invest their surplus funds as short/medium/long term deposits, based on the rates offered and operational requirements.
It is generally observed that the rate of interest or returns provided by different financial institutions vary between 5 to 7 per cent based on the term of the investment. The investments of PSEs shall therefore be oriented towards instruments giving the best returns, keeping in view the administrative and operational requirement.
