The Karnataka government has ordered its departments to suspend transactions with the State Bank of India (SBI) and the Punjab National Bank (PNB). State departments were directed to close their accounts and immediately recover their deposits because of the alleged misappropriation of funds by these two public sector banks.The order, issued on Wednesday, was approved by Chief Minister Siddaramaiah. It further directed that no more deposits will be made into these banks. A similar directive was issued to public enterprises, local institutions, universities, councils, and other institutions.
Forged documents and raids by the ED
The order addressed an alleged fraud involving the Karnataka Industrial Area Development Board (KIADB) which deposited funds of ₹25 crore at Punjab National Bank’s Rajajinagar branch for a fixed term of one year in 2011. However, after the term ended, PNB allegedly only released ₹13 crore. Despite several discussions, the money has not been released, the circular read. Similarly, the other case was related to a fixed deposit at the State Bank of Mysore, which merged with the SBI in 2017. The Karnataka State Pollution Control Board had deposited ₹10 crore at the bank. The Government alleged that this amount was adjusted to the loans taken by a private company using forged documents. The amount has still not been recovered, it said in the order.Alongside, the Karnataka government, calling the sale of land by Hindustan Machine Tools (HMT) at Jalahalli “illegal”, ordered taking back 599 acres of forestland on the company premises. The State Forest department directed forest officials to reclaim the land which is supposedly worth more than ₹10,000 crore. On the other hand, a series of raids were unleashed by the Enforcement Directorate (ED) in July as part of the probe into the alleged unauthorised transfer of ₹88 crore out of the ₹187 crore that belonged to the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation. Two Congress MLAs were among those accused. SHARE
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https://www.thehindubusinessline.com/news/karnataka-govt-orders-state-departments-to-recover-deposits-from-sbi-and-pnb-alleges-fund-misuse/article68525557.ece
