Karnataka Govt's Big Move, Suspends Transactions With SBI, PNB

Bengaluru: The Karnataka government has suspended all transactions with the State Bank of India (SBI) and Punjab National Bank (PNB), state's finance department announced on Wednesday.

In a dramatic move, the government has issued an order suspending all transactions with the State Bank of India and Punjab National Bank. This decision, announced by the Finance Department, directs all state departments to close their accounts with these banks and immediately recover their deposits.

Termination of accounts held in the State Bank of India and Punjab National Bank by state government departments, public enterprises, corporations, local bodies, universities, and other institutions, and immediate return of deposits. Additionally, no further deposits or investments are to be made in these banks.

Why Karnataka Govt has suspended transactions with SBI, PNB?

The directive, approved by Chief Minister Siddaramaiah and issued by Finance Secretary Jaffer, comes amid allegations of misuse of government funds deposited in these institutions. Despite previous warnings and communications regarding the alleged misuse, the issues remained unresolved, prompting this decisive action.

The suspension of transactions with SBI and Punjab National Bank represents a significant shift in the handling of state finances and underscores the government's commitment to addressing financial misconduct.

The development has come after a probe revealed that nearly Rs 190 crore were swindled from these public bank accounts. The Karnataka government has claimed that these top banks are also under scanner.

According to reports, the impact of government's latest move to suspend transactions with SBI and PNB could be up to Rs 1,733 crores.