In the light of the State government’s unprecedented decision to sever long-standing ties with the public sector State Bank of India (SBI) and Punjab National Bank (PNB) over an unresolved dispute on the redemption of fixed deposits, both banks on Thursday said they were in a dialogue with the government for an amicable settlement.
The State government on Monday asked departments, public sectors, and all concerns coming under it to not only sever ties with the two banks but also withdraw the fixed deposits and close accounts with immediate effect. Besides, it directed them not to have any financial transactions with the two banks. They have been set a deadline of September 20 to snap ties with the banks.
What banks said
“As the matter is currently sub judice, 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 said in a statement on Thursday. The government has accused the SBI of not returning ₹10 crore deposit that the Karnataka State Pollution Control Board had opened in 2013 with the State Bank of Mysore (SBM), which merged with the SBI in 2017. It said the FD had been closed prematurely by bank officials who used the money towards settling a loan account of a private company.
In a separate but similar statement, the PNB said, “This is with reference to a circular issued by the Government of Karnataka Secretariat on 12.08.2024 regarding closing the accounts of the State government departments and other institutions with the SBI and the PNB. As the matter is currently sub judice, it will not be prudent to make any specific comment. However, the bank is committed to an amicable resolution of the matter and is in discussion with the Government of Karnataka.” The State government has accused the PNB of not returning ₹12 crore deposit made in 2011 by the Karnataka Industrial Area Development Board.
Multiple meetings
The government has also said that both matters are in court, and despite multiple meetings and communications with the banks, they had not been resolved, leading to the decision to sever ties.
