Deepak Shenoy Criticizes Karnataka Govt’s Order to Close SBI, PNB Accounts: ‘Take Out All FDs…
On August 14, the Karnataka government directed all its departments, boards, corporations, public sector units, and universities to withdraw their deposits and investments from the State Bank of India (SBI) and Punjab National Bank (PNB). This order came in the wake of a financial dispute between the Karnataka Industrial Area Development Board (KIADB) and the two banks.
Deepak Shenoy Criticizes Karnataka Govt’s Order to Close SBI, PNB Accounts: ‘Take Out All FDs…
The government’s decision to close all accounts with these public sector banks drew significant attention. Capital Mind Founder and CEO, Deepak Shenoy, commented on the matter via a post on the social media platform X (formerly Twitter), describing the move as a wise step. Shenoy suggested that this action could be crucial in revealing any potential irregularities in the management of government fixed deposits (FDs) by these banks.
Shenoy urged for a thorough investigation, stating, “The Karnataka government has instructed all departments to close their deposits with SBI and PNB. This is a positive step. Reportedly, PNB hasn’t returned a fixed deposit for a decade, and SBI allowed a government FD to be pledged against a private party’s loan, invoking it when the loan defaulted, resulting in the government not being paid back,” Shenoy wrote.
Deepak Shenoy Criticizes Karnataka Govt’s Order to Close SBI, PNB Accounts: ‘Take Out All FDs…
Shenoy stressed that the best course of action for the banks would be to actively ensure the integrity of all deposits. “Their best hope is to take proactive measures to verify that all deposits are clean by returning all the money,” he added.
On August 15, a day later, both PNB and SBI issued separate statements. “As the matter is currently sub-judice, it would not be wise to make any specific comments. However, the Bank is committed to resolving the issue amicably and is in discussions with the Government of Karnataka,” PNB stated.
The Karnataka government’s order followed the denial to redeem ₹12 crore deposited by the Karnataka Industrial Area Development Board (KIADB) after a scam involving bank employees. A state government circular dated August 12 noted that a meeting with bank officials had failed to produce results, leaving the matter sub-judice.
Similarly, ₹10 crore deposited by the Karnataka State Pollution Control Board (KSPCB) was not returned by the bank due to a scam involving bank officials, according to the circular.
SBI also issued a statement: “As the matter is currently sub-judice, we are unable to provide specific comments at this time. However, we are in ongoing discussions with the Government of Karnataka to resolve the issue amicably.”
In light of these developments, the government circular informed that all state departments, public sector units, corporations, boards, local bodies, universities, and other institutions should withdraw all deposits and investments from all branches of State Bank of India and Punjab National Bank, and refrain from making any future deposits or investments in these banks.
The government also instructed these institutions to close their accounts in the two banks, submit certified closure reports, and send detailed deposit and investment reports to the finance department by September 20, 2024, as reported by PTI.
Shenoy stressed that the best course of action for the banks would be to actively ensure the integrity of all deposits. “Their best hope is to take proactive measures to verify that all deposits are clean by returning all the money,” he added.
On August 15, a day later, both PNB and SBI issued separate statements. “As the matter is currently sub-judice, it would not be wise to make any specific comments. However, the Bank is committed to resolving the issue amicably and is in discussions with the Government of Karnataka,” PNB stated.
The Karnataka government’s order followed the denial to redeem ₹12 crore deposited by the Karnataka Industrial Area Development Board (KIADB) after a scam involving bank employees. A state government circular dated August 12 noted that a meeting with bank officials had failed to produce results, leaving the matter sub-judice.
Similarly, ₹10 crore deposited by the Karnataka State Pollution Control Board (KSPCB) was not returned by the bank due to a scam involving bank officials, according to the circular.
SBI also issued a statement: “As the matter is currently sub-judice, we are unable to provide specific comments at this time. However, we are in ongoing discussions with the Government of Karnataka to resolve the issue amicably.”
In light of these developments, the government circular informed that all state departments, public sector units, corporations, boards, local bodies, universities, and other institutions should withdraw all deposits and investments from all branches of State Bank of India and Punjab National Bank, and refrain from making any future deposits or investments in these banks.
The government also instructed these institutions to close their accounts in the two banks, submit certified closure reports, and send detailed deposit and investment reports to the finance department by September 20, 2024, as reported by PTI.