Karnataka Likely To Transfer Funds From SBI, PNB To State Government Treasury

The Karnataka government will likely transfer funds deposited with the State Bank of India and Punjab National Bank to the state government treasury following allegations of financial irregularities and unauthorised transactions involving state funds by these lenders.

“Many departments have kept money with various banks. The bank officials have misused our funds. We have the option to transfer this money to the government treasury. That way, it will be safe," said Basavaraj Rayareddy, financial advisor to the Karnataka CM and senior MLA. 

The Karnataka state government on Wednesday ordered all departments to close their accounts with the SBI and PNB, citing alleged financial irregularities. 

All state government departments, public undertakings, corporations, boards, local bodies, universities, and other institutions must withdraw their deposits and investments from these banks immediately, according to the order issued by the statement of the government's finance department, adding that no new deposits or investments are to be made in these banks. 

The directive instructed all departments to finalise the closure of their accounts with both banks and transfer the funds by Sept. 20, with the deputy secretary to be notified upon completion.