Taking a major decision on Wednesday, the Karnataka government issued an order to stop all transactions with State Bank of India (SBI) and Punjab National Bank (PNB) with immediate effect. Under this decision, instructions have also been issued to the state departments to close their accounts in these banks and withdraw their deposits.
Why did the government have to take the decision?
According to the order issued by the government, no deposits or investments should be made in these two banks. This instruction issued by Dr. PC Jaffer, Secretary, Finance Department in the state Chief Minister Siddaramaiah government, has come amid allegations of misuse of government money deposited in these two banks. The government has said in strong words that despite several warnings about the alleged misuse, SBI and PNB did not take any action on their part, due to which this decision has been taken.
All departments should immediately close bank accounts.
Pay attention to the instructions given by Jafar, Secretary of the State Finance Department, regarding SBI-PNB, all the departments of the state government, public enterprises, all corporations and local bodies, universities and other institutions run by them should pay attention to the State Bank of India and Punjab. Deposits will have to be withdrawn by closing National Bank accounts. Most of the accounts of government departments in Karnataka are being operated in these two banks. Now, making serious allegations of misuse of funds deposited in SBI and PNB by the government, these instructions have been implemented with immediate effect that the government departments of the state should deposit their money in both the banks and not do any kind of transaction.
Along with this, as per the orders of CM Siddaramaiah, Finance Department Secretary Dr. Jafar has also issued instructions that all FDs kept in these two banks should be closed by September 9.
SBI is the largest government bank of the country.
It is noteworthy that most of the financial work of government departments was being done with these two banks. Actually, SBI is the largest government bank in the country and its market capitalization is Rs 7.17 lakh crore. Whereas Punjab National Bank is the second largest government bank and its market value is Rs 1.25 lakh crore. Be it pension of state government employees or other financial work is usually done mainly in these two government banks.
There is a Congress government in Karnataka led by Chief Minister Siddaramaiah and last year in May 2023, he took oath as the Chief Minister of the state for the second time. Siddaramaiah is the 30th CM of Karnataka. Before this, Siddaramaiah’s first term was from 2013 to 2018.