Finally, the Karnataka government has sealed directives for all departments, boards, corporations, PSUs, and universities in the state to withdraw their deposits and investments from the SBI and the PNB. This order takes immediate force and includes preventing any more transactions with these financial institutions because of persistent claims of embezzlement of funds.
PC Jaffer, Secretary of the Finance Department, published a circular to this effect on August 12. This circular was apparently cleared by Chief Minister Siddaramaiah, with the deadline for compliance being September 20. The directive comes after negotiations with the officials of the various banks failed, having been told that the issue is sub judice.
The action is in response to some cases touching on the Karnataka Industrial Area Development Boards Industries (KIADB) and the Karnataka State Pollution Control Board (KSPCB). Two of them stated challenges in getting back large sums of money: Rs 12 crore and Rs 10 crore – money related to scams implicating bank employees.
The circular also underlines the need for account closure and submission of a certified account closure report and a report of all deposits and investments by their respective due dates.
In response, SBI confirmed that current education talks with its government of Karnataka are continuing but declined to elaborate, stating the legal climate. PNB, in a similar fashion, assured the plaintiff of reasonable endeavours in pursuing an out-of-court resolution.
