Karnataka govt pauses decision for 15 days on PNB and SBI request

The Karnataka government announced on Friday that it has put on hold for 15 days its decision regarding the closure of accounts with the State Bank of India (SBI) and Punjab National Bank (PNB).

“Following the banks' requests, the honourable Chief Minister has directed officials in the finance department to keep the circular in abeyance for 15 days. This will provide the banks with sufficient time to address the issues and resolve the government’s concerns,” said the press statement.

The statement further noted that on August 16, 2024, both banks submitted written representations to the government, requesting an additional 15-day period to resolve the matter. On the same day, senior bank officials met with higher officials from the finance department to reiterate their request.

"The government’s action came in response to alleged fraud in bank branches that resulted in the non-repayment of fixed deposits made by the Karnataka State Pollution Control Board (KSPCB) and the Karnataka Industrial Area Development Board (KIADB). Despite prolonged correspondence and meetings, these issues have remained unresolved since 2012-13," the statement said.