The Karnataka Government has put on hold its decision to close all accounts with the State Bank of India and Punjab National Bank after the banks submitted written representations seeking 15 days to resolve the matter.
The decision followed a meeting chaired by Chief Minister Siddaramaiah with officials of the finance department on Friday.
“On August 16, 2024, both banks submitted written representations to the government, requesting 15 days to resolve the matter…. After considering the bank’s requests, the Honourable Chief Minister has directed officials of the Finance Department to keep the circular in abeyance for 15 days,” a statement issued by the department said.
On Wednesday, the department issued a circular asking all state government departments, public sector units, boards, corporations, local bodies, universities and other institutions to close all accounts with SBI and PNB by September 20.
According to the Government, the decision followed two fraudulent transactions reported at these banks. The first is related to PNB’s Rajajinagar branch, where the Karnataka Industrial Area Development Board started a fixed deposit of Rs 25 crore on September 14, 2011. However, after the term of the deposit ended, PNB allegedly released only Rs 13 crore.
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