In a latest development, Congress' Siddaramaiah-led Karnataka government on Wednesday directed all its departments, boards, corporations, public sector units and universities to close all their deposits and investments in the State Bank of India (SBI) and the Punjab National Bank (PNB) and ordered a pause on any transaction with these institutions.
Moreover, the government institutions are also directed to submit the certified closure report and send details of deposits and investment reports in the prescribed format to the finance department by September 20, 2024.
Reason behind the govt order
The Congress-led government's order came in connection with the denial to redeem Rs 12 crore deposited by the Karnataka Industrial Area Development Board (KIADB) following a scam involving bank employees.
According to a state government circular issued on August 12, the meeting with the bank officials failed to yield any result and the matter is now sub- judice.
Moreover, a deposit of Rs 10 crore made by the Karnataka State Pollution Control Board (KSPCB) was similarly not returned by the bank owing to a scam by the bank officials, the circular said.
The finance secretary P C Jaffer (budget and resource) said in the circular that the Auditor General too had objected to it.
“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.
