A statement issued by the state government on Friday said, “After considering the request made by the banks, the Chief Minister has directed the officials to postpone the circular for 15 days.” It said that postponing the circular will “give the banks time to resolve the related issues and address the concerns of the government.”
The Karnataka government had issued an order to all its departments to stop all transactions with the State Bank of India and Punjab National Bank. Now the state government has postponed this order for 15 days. Karnataka Chief Minister Siddaramaiah, considering the request made by both the banks, decided to postpone his order on Friday.
Banks given 15 days’ time
The Karnataka government had issued a circular on August 12. In this, all its departments, boards, corporations, public sector units and universities were ordered to stop all kinds of government transactions with SBI and PNB with immediate effect.
A statement issued by the state government on Friday said, “After considering the request made by the banks, the Chief Minister has directed the officials to postpone the circular for 15 days.” It said that postponing the circular will “give the banks time to resolve the related issues and address the concerns of the government.”
What did the Karnataka government say in its order?
Earlier, the order issued by the government said that no deposits or investments should be made in these two banks. This instruction from Dr PC Jaffer, Secretary of the Finance Department in the Chief Minister Siddaramaiah government, came amid allegations of misuse of government funds deposited in these two banks.
The government said in strong words that despite repeated warnings about the alleged misuse, SBI and PNB did not take any action on their part, due to which this decision has been taken.
Most of the government accounts are in these two banks
In the instructions given by Secretary Jaffer regarding SBI-PNB, it was said that all the departments of the state government, public enterprises, all corporations and local bodies, universities and other institutions will have to close their State Bank of India and Punjab National Bank accounts and withdraw the deposits.
Most of the accounts of government departments in Karnataka are being operated in these two banks. Dr. Jaffer had also issued instructions that all FDs kept in these two banks should be closed by September 9.
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