Karnataka govt cut ties with SBI, PNB over financial frauds
Credit: PTI Photos
Bengaluru: A day after state government’s decision to sever all its ties with State Bank of India (SBI) and Punjab National Bank (PNB) over ‘financial frauds’ that led to embezzlement of public money, both the SBI and the PNB on Thursday expressed their desire to resolve the issues with state government through ‘amicable resolution’.
Both the banks have issued separate statements in this regard.
The statement issued by the PNB stated, “As the matter is currently sub judice, it will not be prudent to make any specific comments at this time. However, the bank is committed for amicable resolution of the matter and is in discussion with the state government in this regard.”
While the SBI in its statement maintained, “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.”
According to the Finance department circular, the SBI and the PNB did not cooperate with the government in recovering Rs 22 crore money that was embezzled.
The cases involved deposits made by two government entities - the Karnataka Industrial Areas Development Board (KIADB) and the Karnataka State Pollution Control Board (KSPCB) in the PNB and the SBI, respectively.
Both the banks had filed CBI cases in connection with these frauds and refused to repay the embezzled amounts. Therefore, the Public Accounts Committee (PAC) had recommended the state finance department to sever all its business dealings with both banks.
Based on the recommendation of PAC, the state government on August 12 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 carrying out any business with these institutions. The order was reported on August 14.
The government also directed for submission of certified closure report and to send details of deposits and investment reports in the prescribed format to the finance department by September 20, 2024.