The Karnataka government on Friday has put its directive for all departments to halt their accounts with the State Bank of India and Punjab National Bank on hold for 15 days following discussions with bank officials.
Both the banks submitted written requests on Friday to the government for a 15-day extension to resolve the issue. That same day, senior bank officials met with senior officials from the Finance Department and reiterated their request.
"After considering the banks' requests, the Honorable Chief Minister has directed officials of the Finance Department to keep the circular in abeyance for 15 days. This will allow the banks sufficient time to address the issues and redress the concerns of the government," the Chief Minister’s office said in a statement.
The government added that it is committed to transparency and accountability in all its dealings. "We will continue to monitor the situation and take appropriate action to protect the interests of all stakeholders."
Karnataka Likely To Transfer Funds From SBI, PNB To State Government Treasury
The move comes after the state government on Wednesday had instructed all departments to close their accounts with SBI and PNB, after the allegations of financial irregularities and unauthorised transactions involving state funds. The government said that previous warnings and communications about the allegations were ignored, leading to the decision to close the accounts.
The order highlighted that unauthorised transactions involving Rs 187 crore of the corporation’s funds were discovered, with Rs 88.62 crore being transferred into accounts held by IT companies and a cooperative bank in Hyderabad.
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