Daijiworld Media Network
Bengaluru, Aug 14: In response to allegations of misuse of funds from government accounts, the Karnataka government has issued an order suspending all transactions with the State Bank of India (SBI) and Punjab National Bank (PNB), both Central government-owned.
The Finance Department has instructed all state departments to close their accounts with these banks and recover their deposits immediately.
"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 must be terminated forthwith. Additionally, no further deposits or investments are to be made in these banks," the order stated.
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This move comes amid a political clash between the Congress-led Karnataka government and the opposition BJP over an alleged money transfer scam involving the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd.
The alleged scam surfaced after the corporation’s accounts superintendent, Chandrashekhar P, died by suicide on May 26, leaving a note behind.
The note claimed that Rs 187 crore from the corporation was transferred without authorization, with Rs 88.62 crore of this amount moved to other accounts, including those of IT companies and a cooperative bank based in Hyderabad.
The finance department’s order also alluded to an alleged fraud involving funds from the Karnataka Industrial Area Development Board. It is claimed that money was siphoned off with the involvement of bank officials from Punjab National Bank. The government noted that this case remains in court with several crores still unrefunded.
Additionally, it was reported that the Karnataka State Pollution Control Board’s deposited funds with SBI were allegedly used to secure a loan for a private company using forged documents in 2013. This case is also pending in court.
The order mandates that all departments must complete the process of closing their accounts with both banks and withdrawing funds by September 20, and that the deputy secretary be informed of the completion.