In the aftermath of the high-profile Chitrakoot treasury scam, the Uttar Pradesh government has introduced a major overhaul in its pension disbursement system by implementing a stricter monitoring framework across all state treasuries. The Finance Department has issued its first comprehensive Standard Operating Procedure (SOP) for treasury operations, making the process of changing pensioners’ bank accounts significantly more stringent. The revised mechanism is expected to impact nearly 1.2 million pensioners across the state.
Why the reforms were needed
According to officials familiar with the matter, the reforms were triggered by the Chitrakoot treasury fraud case, where alleged manipulation of deceased pensioners’ bank accounts resulted in the embezzlement of crores of rupees over several years. Investigators had found that dormant or closed accounts were allegedly reactivated and used for unauthorized transfer of government funds. Following the revelations, the state government decided to completely restructure the pension verification and account modification system.
New multi-level approval process
Under the newly introduced SOP, Chief Treasury Officers (CTOs) and senior treasury officials will no longer have the authority to independently approve changes in pensioners’ bank accounts. Their role will now be limited to recommendation and verification. Final approval for any modification will be granted only by the Additional Director at the divisional level. Officials said the multi-layered approval mechanism is aimed at preventing fraudulent entries, illegal account alterations and documentation-related manipulation.
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As per the revised procedure, pensioners seeking a bank account change must now submit a self-attested copy of the new bank account, details of the previous account and, in cases involving branch transfer, a no-objection certificate from the earlier branch. After preliminary scrutiny by the dealing assistant, the application will move through the Assistant Treasury Officer and Chief Treasury Officer before being sent electronically to the divisional authority for approval. Authorities have also introduced an email-based authorization process to ensure a secure digital audit trail for every transaction and approval stage.
SOP scope and consolidation of norms
Finance Department officials stated that treasury operations in Uttar Pradesh were previously governed through multiple government orders issued over time, often leading to procedural ambiguity and inconsistent implementation. The newly issued SOP consolidates all treasury-related processes into a unified framework covering pension payment orders (PPOs), first-time pension authorization, regular pension disbursement, family pension, pension arrears, life certificate verification and account modification procedures.
The Chitrakoot treasury scam had raised serious concerns regarding financial oversight and internal control mechanisms within the state’s treasury system. Investigators alleged that between 2018 and 2025, fraudulent transactions worth nearly ₹43.13 crore were carried out through manipulation of pension accounts linked to deceased beneficiaries. Cases were registered against 97 individuals, including more than 90 pensioners, and multiple arrests have already been made. Authorities have also frozen dozens of bank accounts and recovered part of the allegedly siphoned funds.
Expert views and next steps
Experts tracking financial and cyber-enabled frauds believe the incident exposed critical vulnerabilities in government payment systems. Former IPS officer and noted cyber crime expert Prof. Triveni Singh said insider manipulation and document tampering remain among the biggest risks in pension and treasury-linked financial systems. According to him, strong digital audit trails, layered approval structures and real-time verification mechanisms are essential to preventing large-scale financial fraud involving public funds.
Officials indicated that the Finance Department may introduce additional technological safeguards in the coming months, including advanced audit modules, digital tracking systems and enhanced compliance monitoring across treasury offices. They described the newly introduced SOP not merely as an administrative reform, but as a significant attempt to improve transparency, accountability and financial security in Uttar Pradesh’s government payment ecosystem.
