Karnataka government issued an order to close all government accounts in SBI and PNB
Karnataka: The Siddaramaiah government of Karnataka state has taken an important decision, under which all government departments of the state have been ordered to stop all transactions from the accounts of Punjab National Bank (PNB) and State Bank of India (SBI). After this order, all the departments of the state government have been instructed to withdraw all the money, deposits, and fixed deposits (FDs) deposited in these two banks and close the accounts.
Details of the order
Karnataka Government: In this order issued by Jaffer, Secretary of the State Finance Department, it has been clarified that all the departments of the Karnataka Government are not to do any transaction in PNB and SBI from now on. Along with this, instructions have also been given to withdraw the deposits kept in these banks. The order comes in the context of cases where the government has accused both the banks of fraud and failure to pay FDs.
Background of the decision
There are two important reasons behind this decision: first, failure to repay FD amounts on time, and second, complaints of fraud by the banks. The Karnataka government believes that the ongoing problems with these banks are adversely affecting the financial activities of the departments, leading to hindrances in administrative work.
Further action
After the order, all government departments will now have to withdraw the deposits kept in these banks immediately and complete the process of closing these accounts. The government has clarified that any kind of financial transactions with these banks will be avoided in future and alternatives will be sought for other banks for any government financial operations.