Karnataka govt orders departments to close accounts with SBI, PNB

The Karnataka government has instructed all state government departments to suspend transactions with State Bank of India (SBI) and the Punjab National Bank (PNB).

In an order approved by Chief Minister Siddaramaiah and issued by the finance secretary on Wednesday (August 14), all state departments have been asked to close their accounts with SBI and PNB and recover their deposits with immediate effect. The departments have also been asked to not make any more deposits in the two banks.

Besides state government departments, the order also applies to public enterprises, corporations, local bodies, universities and other institutions, the order said.

The government’s directive comes amid allegations of misuse of funds from government accounts by SBI and PNB. The government had earlier given warnings to the banks on the allegations, but the issue was unresolved, forcing it to order the shutting down of accounts.