The Karnataka government has issued an order suspending all transactions with the State Bank of India (SBI) and Punjab National Bank. The order, approved by Chief Minister Siddaramaiah and issued by the Finance Secretary, directed all state departments to close their accounts with these banks and immediately recover their deposits. This comes amid allegations of misuse of government funds and illegal transactions.
The order came after the denial to redeem Rs 12 crore deposited by the Karnataka Industrial Area Development Board (KIADB) following a scam involving bank employees.
Accounts held by state government departments, public enterprises, corporations, local bodies, universities and other institutions in the State Bank of India and Punjab National Bank should be terminated immediately. Additionally, no further deposits or investments should be made in these banks.
“In this background, it is informed through this circular that the state government’s departments, public sector units, corporations, boards, local bodies and universities and other institutions should withdraw all the deposits/investments made in all the branches of the State Bank of India and the Punjab National Bank and no deposits/investments should be made in future,” the circular read.
The government also directed the government institutions to close their accounts in these two banks and submit the certified closer report and send details of deposits and investment reports in the prescribed format to the finance department by September 20, 2024.
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