The Karnataka government on Wednesday took a major decision and issued an order to stop all transactions with the State Bank of India (SBI) and Punjab National Bank (PNB) with immediate effect. Under this decision, state departments have also been instructed to close their accounts in these banks and withdraw their deposits.
Why did the government have to take this decision?
According to the order issued by the government, no deposits or investments should be made in these two banks. This directive issued by Dr. PC Jaffer, Secretary of the Finance Department in the state Chief Minister Siddaramaiah government, has come amid allegations of misuse of government funds 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 their bank accounts
Look at the instructions given by the state finance department secretary Jafar regarding SBI-PNB, all the departments of the state government, public enterprises, all corporations and local bodies, universities and other institutions will have to close their accounts in State Bank of India and Punjab National Bank and withdraw the deposits. Most of the accounts of government departments in Karnataka are being operated in these two banks.
Now, the government has made serious allegations of misuse of money deposited in SBI and PNB and these instructions have been implemented with immediate effect that the state government departments should not deposit their money in both the banks and should not do any kind of transaction.
Along with this, as per the orders of CM Siddaramaiah, Finance Department Secretary Dr. Jaffer has also issued instructions that all FDs kept in these two banks should be closed by September 9.
SBI is the largest government bank in the country
It is worth noting 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. Whether it is the pension of state government employees or other financial work, it is usually done primarily in these two government banks.
Karnataka has a Congress government led by Chief Minister Siddaramaiah and in May 2023, he took oath as the Chief Minister of the state for the second time. Siddaramaiah is the 30th CM of Karnataka. Earlier, Siddaramaiah’s first term was from 2013 to 2018.
