The Karnataka government had issued orders to all its departments to stop all transactions with State Bank of India and Punjab National Bank. Now the state government has postponed this order for 15 days. Karnataka Chief Minister Siddaramaiah decided to postpone his order on Friday considering the requests made by both the banks.
Banks given 15 days time
The Karnataka government had issued a circular on 12 August. In this, all its departments, boards, corporations, public sector units and universities were ordered to stop all types of government transactions with SBI and PNB with immediate effect.
A statement issued by the state government on Friday said, ‘After considering the request made by the banks, the Chief Minister has directed the officials to keep the circular in abeyance for 15 days.’ It said postponing the circular would ‘provide time to banks to resolve related issues and address the government’s concerns.’
What did the Karnataka government say in its order?
Earlier in the order issued by the government, it was said that no deposit or investment should be made in these two banks. This instruction came from Dr PC Jaffer, Secretary, Finance Department in the Chief Minister Siddaramaiah government, amid allegations of misuse of government funds deposited in these two banks.
The government 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.
Most of the government accounts are in these two banks.
In the instructions given by Secretary Jafar regarding SBI-PNB, it was said that all the departments of the state government, public enterprises, all corporations and local bodies, universities and other institutions including State Bank of India and Punjab National Bank accounts operated by them should The deposit will have to be withdrawn after closing.
Most of the accounts of government departments in Karnataka are being operated in these two banks. Dr. Jafar had also issued instructions that all FDs kept in these two banks should be closed by September 9.