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 stop all transactions with them. They said on Thursday that they are in talks with the state government for an “amicable solution” to the matter. In the first official comment after the Karnataka government’s decision, the government banks issued separate statements saying that the matter at the root of the problem is sub judice.

What did the banks say?

SBI’s statement said, “As the matter is still sub judice, we are unable to make any specific comment at this 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 that 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 talks with the Karnataka government.”

Karnataka government had given this order
The Karnataka 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 Punjab National Bank and stop any business with these institutions. 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 after the scam involving bank employees. The state government said that the meeting with the bank officials did not yield any result and the matter is now pending in the court. The circular said that 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 the bank officials. The government also directed the government institutions to close their accounts in these two banks and submit certified closure reports and send details of deposit and investment reports in the prescribed format to the Finance Department by September 20, 2024.