'Arbitrary and suspicious': BJP MP on Karnataka govt's decision to snap dealings with SBI, PNB

Bengaluru: BJP Rajya Sabha member Lahar Singh Siroya on Friday said the Karnataka government’s decision to close its accounts with the State Bank of India and Punjab National Bank looked "arbitrary and suspicious" in view of a Rs 187 crore scam in a state-owned corporation through the Union Bank of India.

He sought to know why the two nationalised banks were targeted when all the banks are governed by the Reserved Bank of India guidelines.

Quoting media reports, Siroya said all the departments have been directed to close accounts and withdraw deposits from these two banks.

The reports also said no further deposits or investments will be allowed in these banks. The decision had apparently been taken over misappropriation of funds, he said.

Karnataka government ordered all its departments, boards, corporations, public sector units and universities to withdraw all their deposits and investments in the State Bank of India and the Punjab National Bank and stop any business with these institutions on August 12. The order was reported on August 14.

"This move by the Karnataka government looks arbitrary and suspicious to me, especially after the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation (KMVSTDC) scam came out, in which around Rs 187 crore was illegally transferred through a nationalised bank," he said.

The BJP MP from Karnataka was referring to the scam in which a former Karnataka Minister B Nagendra was arrested by the Enforcement Directorate and is presently in jail.

The scam came to light after the Accounts Superintendent of KMVSTDC, Chandrasekharan P, died by suicide. In his suicide note, he explained how a new account was created in the UBI where all the money belonging to the Corporation was transferred.

Further Rs 88 crore was illegally transferred to various bank accounts in Hyderabad.

Siroya wondered whether a state government could take such a unilateral decision against two nationalised banks and whether or not all the banks are governed by the rules and regulations of the RBI.

"If the state government has problems with the banks, should they not have reached out to the RBI? Can some nationalised banks be more acceptable and some less to the state government? What is the nature of misappropriation that the state government is talking about? Have they probed it? What really is happening within the Government of Karnataka?” the BJP asked.

He expressed his apprehension about whether the Congress-led state government was trying to deliberately create suspicion about the banking system through this action.

He appealed to Union Finance Minister Nirmala Seetharaman, who is also a Rajya Sabha member from Karnataka, to take note of this order.