Karnataka government had given order to close accounts in SBI and PNB, now know what the banks said

State Bank of India (SBI) and Punjab National Bank (PNB) on Thursday said they were hurt by the surprise decision of the Karnataka government to halt all transactions with them. They said on Thursday that they are in talks with the state government to find an “amicable solution” to the matter. In their first official comment after the Karnataka government’s decision, the public sector banks issued separate statements saying the matter at the root of the problem is sub judice.

What did the banks say?

SBI’s statement said, “Since the matter is sub judice, we are unable to offer any specific comment at this point of time. However, we are in constant dialogue with the Karnataka government to resolve the issue amicably.” Punjab National Bank also issued a similar statement and said it would not be prudent to make any specific comment on the matter. PNB said in the statement, “The bank is committed to an amicable resolution of the matter and is in dialogue with the Karnataka government.”

The Karnataka government gave this order

The Karnataka government on August 12 ordered all its departments, boards, corporations, public sector units, in and universities to withdraw all their deposits and investments in the State Bank of India and Punjab National Bank and cease any business with these entities. The order was issued on August 14. The order comes after the Karnataka Industrial Area Development Board (KIADB) refused to withdraw Rs 12 crore deposited following a scam involving bank employees. The state government said meetings with bank officials did not yield any result and the matter is now sub judice. The circular said Rs 10 crore deposited by the Karnataka State Pollution Control Board (KSPCB) has not been returned by the bank due to the scam committed by bank officials. The government also directed government institutions to close their accounts in these two banks and submit certified closure reports and details of deposits and investment reports in the prescribed format to the Finance Department by September 20, 2024.