As Karnataka government asked its officials to close all its account with State Bank of India & the Punjab National Bank % also withdraw all deposits, lenders are in talks with state for further solution.
The Karnataka government has 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 transacting any business with these institutions.
The order came after Rs 12 crore deposited by the Karnataka Industrial Area Development Board (KIADB) were not given to them over alleged fraud involving bank employees.
Similarly, Rs 10 crore deposited by the Karnataka State Pollution Control Board (KSPCB) was not returned by the bank owing to a scam by the bank officials, the circular said.
‘Withdraw All Deposits From SBI & PNB,’ Asks K’Taka Govt
The government also directed the government institutions to close their accounts in these two banks and submit the certified closer report and send details of deposits and investment reports in the prescribed format to the finance department by September 20, 2024.
The circular said “In this background, it is informed through this circular that the state government’s departments, public sector units, corporations, boards, local bodies and universities and other institutions should withdraw all the deposits/investments made in all the branches of the State Bank of India and the Punjab National Bank and no deposits/investments should be made in future.”
SBI & PNB In Talks With K’Taka Govt To Find Solution
Hit by the decision of the Karnataka government to stop all transactions with them, State Bank of India and Punjab National Bank on Thursday said they are in talks with the state government and trying to find an “amicable resolution” on the matter.
Both the banks said the matter at the root of the problem is subjudice.
“As the matter is currently subjudice, we are unable to provide any specific comments at this time. However, we remain in ongoing discussions with the Government of Karnataka to resolve the issue amicably,” the SBI statement said.
SBI’s peer Punjab National Bank, also had a similar statement and pointed out that it will not be prudent to offer a specific comment on the matter.
“‘The Bank is committed for an amicable resolution of the matter and is in discussion with Government of Karnataka,” the PNB statement said.
A state government circular on August 12 said the meeting with the bank officials did not yield any result and the matter is now sub judice.
(With Inputs From PTI)