Karnataka govt pauses circular prohibiting 15-day hold on withdrawal of SBI, PNB deposits

The Karnataka government had recently ordered its departments and public units to end all business transactions with the State Bank of India (SBI) and Punjab National Bank (PNB).

Now the state government has postponed this order for 15 days. Chief Minister Siddaramaiah decided to put this decision on hold to consider the request made by both the public sector banks.

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The Karnataka government, in a circular issued on August 12, had ordered all its departments, boards, corporations, public sector units and universities to stop all government transactions with SBI and PNB.

There will be time to resolve the issues

The government said in a statement, “After considering the requests of the banks, the Chief Minister of the state has directed the officials of the Finance Department to hold the circular for 15 days.” Holding the previous circular will give the banks enough time to resolve the related issues and address the concerns of the government. According to the statement, the government is committed to ensuring transparency and accountability in all its transactions. The government says that we will continue to monitor the situation and take appropriate action to protect the interests of all stakeholders.

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Crores of rupees are stuck in these banks of the state government

According to the statement, the action was taken in response to alleged frauds in bank branches, which led to non-repayment of fixed deposits made by the Karnataka State Pollution Control Board (KSPCB) and Karnataka Industrial Area Development Board (KIADB). It also said that due to scams in these banks, Rs 12 crore of KIADB is stuck in PNB and Rs 10 crore of KSPCB is stuck in SBI for years.

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