Karnataka’s Cease-Transaction Order: SBI, PNB Issue Responses
In a deepening financial conflict, the State Bank of India (SBI) and Punjab National Bank (PNB) have reiterated their determination to resolve the ongoing dispute with the Karnataka government.
On August 12, the Karnataka government issued an order instructing all state departments, boards, corporations, public sector units, and universities to halt transactions with SBI and PNB. This directive comes in response to accusations that employees from both banks were involved in withholding substantial funds owed to crucial state institutions.
The Karnataka Industrial Area Development Board (KIADB) had sought the redemption of Rs 12 crore, while the Karnataka State Pollution Control Board (KSPCB) requested Rs 10 crore. The alleged failure of the banks to return these funds led the government to instruct all state entities to withdraw their deposits and investments from SBI and PNB by September 20.
Responding to the situation, an SBI spokesperson stated, “As the issue is currently under judicial consideration, we cannot offer detailed comments. However, we are in active discussions with the Karnataka government to find a mutually agreeable solution.”
PNB echoed this sentiment, affirming their commitment to resolving the issue. “The Bank remains focused on achieving an amicable resolution and is in continuous dialogue with the Government of Karnataka,” their statement read.
The government’s order, which includes a strict deadline for closing accounts and submitting closure reports by September 20, presents a significant hurdle for both banks.
