The government has issued an order to suspend all transactions with the State Bank of India (SBI) and Punjab National Bank (PNB). The Karnataka government has issued an order to suspend all transactions with the State Bank of India (SBI) and Punjab National Bank (PNB). The state government has taken this step after accusing both these banks of misusing funds from government accounts.
The government’s finance department has directed all state departments to immediately close their accounts held in these banks and withdraw the deposits. The order specifies the termination of accounts held by state government departments, public enterprises, corporations, local bodies, universities, and other institutions in SBI and PNB. Additionally, these banks should not receive any new deposits or investments.
The Karnataka Maharishi Valmiki Scheduled Tribes Development Corporation Limited has been implicated in an alleged money transfer scam, which is the main reason for this order. The scam came to light when the corporation’s accounts superintendent, Chandrashekhar P, committed suicide and left a note claiming an unapproved transfer of ₹187 crore. In this case, IT companies and a Hyderabad-based cooperative society received a significant portion of the money.
Apart from this, similar scams are also associated with Karnataka Industrial Area Development Board and Karnataka State Pollution Control Board, in which money was misused with the connivance of bank officials.
The government has requested that all departments complete this process by September 20 and notify the Deputy Secretary.