Karnataka Govt Orders Closure of All Accounts with SBI, PNB
Moneylife Digital Team 14 August 2024
The Karnataka state government has asked its department of finance to terminate all accounts with State Bank of India (SBI) and Punjab National Bank. 
 
The order approved by chief minister (CM) Siddaramaiah and issued by the finance secretary directed all state departments, public enterprises, corporations, local bodies, universities and other institutions to close their accounts with these banks and immediately recover their deposits.
 
The state government has also mandated that no further deposits or investments be made in the two largest public sector banks (PSBs).
 
According to reports, this state government decision follows allegations of misuse of funds and illegal transactions in SBI and PNB.
 
Following a scam involving bank employees, the state government was denid to redeem its Rs12 deposited by the Karnataka Industrial Area Development Board (KIADB).

According to a state government circular issued on 12 August 2024, the meeting with the bank officials did not yield any result, and the matter (of redeeming deposits) is now sub-judice.
 
“A similar directive was issued to public enterprises, corporations, local bodies, universities, and other institutions. The banks were given prior warnings and communications regarding the allegations. However, as the issue remained unresolved, the government decided to take this drastic step,” a report from IndiaToday says.
 
Comments
ramaninv1953
4 weeks ago
It is a misguided step by Karnataka Government.
amit_kumar
4 weeks ago
I think we should thank "co-operative federalism" at the center for another grand achievement.
barokhoka1956
4 weeks ago
Being a State ruled by the Major Opposition Parties within the Republic of India, can they cut off financial relations with two Largest Public Sector Banks? It's suicidial both for the State and the people living there.
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