The state government has asked all its ministries, public sector bodies, universities and all subordinate agencies and organisations not to do business with the State Bank of India (SBI) and the Punjab National Bank (PNB) as the two banks allegedly defaulted on their fixed deposits years ago. The finance ministry has issued a circular to all department heads detailing how the Karnataka Industrial Areas Development Board (KIADB) could not recover a deposit from the PNB and the Pollution Control Board was denied a similar deposit from the SBI. Several rounds of talks by the government with the two public sector banks have proved futile, the government circular said.
The Finance Ministry, which comes under the authority of Chief Minister Siddaramaiah, has asked all department heads to immediately close accounts and fixed deposits in the two banks and report to the government.
The circular also mentioned the comments of the Audit Office and the Audit Committee of the State Parliament on this omission.
According to official sources, high-ranking representatives of the two banks immediately went to the Ministry of Finance to persuade the government to continue doing business with them.
