The State Bank of India and Punjab National Bank are in dialogue with the Karnataka state government for an amicable resolution after the latter ordered the closure of all accounts of the state government, departments, and other institutions with both banks.
"As the matter is currently sub-judice, it will not be prudent to make any specific comment. However, the bank (PNB) is committed to amicable resolution of the matter and is in discussion with the Government of Karnataka," PNB said in a press release.
SBI also echoed a similar view, saying that as the matter is currently subjudice, the bank will be unable to provide any specific comments at this time but will remain in ongoing discussions with the government to resolve the issue amicably.
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Late Wednesday, the Karnataka state government announced that all state government departments, public undertakings, corporations, boards, local bodies, universities, and other institutions must withdraw their deposits and investments from these banks immediately.
According to the circular issued by the government's finance department, no new deposits or investments should be made in these banks due to allegations of fund misappropriation.
The meeting with the bank officials yielded no result, and the matter is now sub-judice, the circular said.
All departments are to finalise the closure of their accounts with both banks and transfer the funds by September 20, with the deputy secretary to be notified upon completion.
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