Bengaluru: The Karnataka government has issued an order instructing all its departments, boards, corporations, public sector units, and universities to withdraw their deposits and investments from the State Bank of India (SBI) and Punjab National Bank (PNB) and cease any further transactions with these banks.
The directive follows the banks’ refusal to return ₹12 crore deposited by the Karnataka Industrial Area Development Board (KIADB) after a scam involving bank employees. Similarly, ₹10 crore deposited by the Karnataka State Pollution Control Board (KSPCB) remains unreturned due to another bank-related scam.
The state government’s August 12 circular noted that meetings with bank officials failed to resolve the issue, which is now under legal consideration. The circular, signed by Finance Secretary P.C. Jaffer, stated that the Auditor General had also raised objections.
In light of these developments, the government has ordered all related institutions to withdraw deposits from all SBI and PNB branches and refrain from future investments. Additionally, they must close their accounts in these banks and submit certified closure reports and detailed deposit and investment reports to the finance department by September 20, 2024.
