Crores of rupees have not been refunded by SBI and PNB due to alleged fraud committed by bank officials, said the Karnataka government.
Published Aug 14, 2024 | 8:13 PM ⚊ Updated Aug 15, 2024 | 9:59 PM
SBI and PNB banks (Wikimedia Commons)
The Government of Karnataka took a drastic measure on Wednesday, 14 August to withdraw all deposits and investments from State Bank of India (SBI) and Punjab National Bank (PNB), citing fraudulent activities and failure to refund money despite court cases pending for over a decade.
In an official order, the state government stated: “Karnataka Industrial Area Development Board had paid through check of ₹25 crore to Punjab National Bank in Bengaluru’s Rajajinagar branch to invest in one-year fixed deposit on 14 September, 2021. In return, from Shankree branch of the same bank in Salem, ₹12 crore as a fixed deposit receipt and another fixed deposit receipt of 13 crore were given. After expiry of the fixed deposit, ₹13 crore was encashed,” read the order.
However, the money has not been refunded by the bank due to the alleged fraud committed by bank officials in relation to the second deposit account. Correspondence and meetings with the bank officials on this matter were of no avail and the case has been pending in court for over 10 years, said the Karnataka government.
Similarly, the order further stated, “Karnataka State Pollution Control Board issued an order to the then State Bank of Mysore in Avenue Road at Bengaluru in which ₹10 crore had been invested in fixed deposit by August, 2013. Before the expiry of the period, the money related to the said deposit was adjusted by the bank officials to the name of a private company on the basis of forged documents.”
#Karnataka: The @siddaramaiah‘s @INCKarnataka government orders withdrawal of all deposits & investments from the State Bank of India & Punjab National Bank citing fraudulent activities & failure to refund money despite court cases pending for over a decade.
All state… pic.twitter.com/I9ZDyBIhGV
— South First (@TheSouthfirst) August 14, 2024
The state government says that even in this instance, despite correspondence and several meetings, the bank did not agree to refund the money. This case is also pending in court.
Report by the Comptroller Auditor-General (CAG) contained serious objection in relation to these cases. Audit findings related to this matter have been discussed many times during Public Accounts Committee meeting, in all branches of these two banks to recover all types of deposits/investments made by State Government Departments, Public Undertakings, Corporations, Boards, Local Bodies, Universities and other institutions.
“In this context, all deposits and investments made by State Government Departments, Public Undertakings, Corporations, Boards, Local Bodies, Universities and other institutions in all branches of State Bank of India and Punjab National Bank will be withdrawn immediately and no further deposits or investments shall be made in the said banks.”
Further, the offices, public undertakings, corporations, boards, local bodies, universities and other institutions have been asked to close the deposits and all other accounts in all branches of the State Bank of India and the Punjab National Bank. The details pertaining to the closure of bank accounts, deposit and certification have been asked to be submitted to the Deputy Secretary to Government, Budget and Resources Branch, Finance Department by 20 September 2024.
(Edited by Neena with inputs from Mahesh M Goudar)
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