Postgraduate students who quit before the completion of their course will also be barred from seeking admission to another institute for the next three years, a Medical Education and Research Department spokesperson said.
Haryana government notified the new policy last week for admissions from the coming 2018-2019 session to government, government-aided and private medical and dental educational institutions in the state.
Admission seekers will now have to execute a bond, saying they will complete the course.
Undergraduate students studying for an MBBS or a BDS will pay Rs 5 lakh if they quit once the course has begun, the spokesperson said.
Candidates seeking admission to MD or MS courses will execute a bond for Rs 7.5 lakh.
The institutions reserve the right to recover this money from the defaulters. The rule also applies to candidate seeking admission under the management quota, the spokesman said.
This practice of executing a bond has been made compulsory for the first time in the state.
In the recent past, medical institutes had to struggle with vacant seats when candidates left after getting admission to institutes in other states or abroad.
The state government's move is being seen as an attempt to safeguard the interest of medical institutions.
There are five recognised government, one government-aided and five private medical colleges and one government and 10 private dental colleges in Haryana.
The candidates at the time of admission will be required to execute the bond with two sureties.
The new policy also says fees will be payable annually and the institutes will not insist upon the candidates to deposit the fee for the entire course in advance.
The fee for the first year would be deposited by the successful candidates through a demand draft payable to the registrar at B D Sharma University of Health Sciences in Rohtak.
The fee would be transferred to the institute where the candidate finally gets admission.
The fee will not be refunded after the last date of admission except in case of death, serious mental illness or serious physical injury.