Karnataka govt pauses circular prohibiting 15-day hold on withdrawal of SBI, PNB deposits

  • A government circular ordered all its departments, boards, corporations, public sector units and universities to withdraw their deposits and investments in SBI and PNB

Nikita Prasad( with inputs from PTI)
Published16 Aug 2024, 09:21 PM IST
The Karnataka government on Friday kept its circular in abeyance for 15 days
Photo: Aniruddha Chowdhury/Mint
The Karnataka government on Friday kept its circular in abeyance for 15 days Photo: Aniruddha Chowdhury/Mint

The Karnataka government on Friday, August 16, kept its circular in abeyance for 15 days, which prohibited all business transactions with the State Bank of India (SBI) and the Punjab National Bank (PNB). The decision came after Chief Minister Siddaramaiah considered the two banks’ requests.

A government circular on August 12 ordered all its departments, boards, corporations, public sector units and universities to withdraw all their deposits and investments in the SBI and the PNB and stop transacting any business with these institutions.

Also Read: PSBs Canara Bank, Bank of Baroda, UCO Bank hike key lending rates across tenures after RBI MPC verdict; Check dates here

"After considering the banks' requests, the Chief Minister has directed officials of the Finance Department to keep the circular in abeyance for 15 days," said the state government in its circular. "It said that putting the previous circular on hold "will allow the banks sufficient time to address the issues and redress the government's concerns."

‘’The government is committed to ensuring transparency and accountability in all its dealings. We will continue to monitor the situation and take appropriate action to protect the interests of all stakeholders," it added.

Why are SBI, PNB deposits on hold in Karnataka?

The state government said that based on the observations made by the Public Accounts Committee on July 2 and August 6 and the audit findings included in the Comptroller and Auditor General's report, the government decided to issue the circular on August 12, directing all departments to withdraw their deposits and restrict further deposits in all branches of SBI and PNB.

Also Read: RBI vs US Fed: Which central bank will cut interest rates first? Here’s a 5-point analysis

The state government added that this action was taken in response to the alleged fraud in the bank branches, which 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).

The government said these issues remained unresolved despite prolonged correspondence and meetings since 2012-13. It added that on August 16 both banks submitted written representations to the government, requesting a 15-day period to resolve the matter. 

The same day, senior bank officials met with higher officials of the Finance Department and reiterated their request. According to the previous circular, 12 crore belonging to the KIADB and 10 crore of the KSPCB were blocked by PNB and SBI for many years owing to scams in these two banks. 
 

Also Read: PNB Q1 Results: Net profit zooms 159% to highest-ever at 3,251 crore, NII up 10% YoY; Asset quality improves
 

SBI, PNB Q1 Results

SBI reported an almost flat standalone net profit of 17,035 crore for the first quarter of the current fiscal year, growing one per cent compared to 16,884.2 crore in the corresponding period last year. The bank's total income increased to 1,22,688 crore in the first quarter up from 1,08,039 crore a year ago. On Friday, shares of SBI settled 1.18 per cent higher at 812.45 apiece on the BSE.

PNB reported a rise of 159 per cent in standalone net profit at 3,251.5 crore – its highest-ever quarterly profit in the June quarter, compared to 1,255.4 crore in the corresponding period last year. The substantial increase in net profit is attributed to robust performance across various financial metrics, driven mainly by a decline in bad loans and an improvement in interest income. Shares of PNB settled 0.44 per cent lower at 113.05 apiece on the BSE.

 

With inputs from PTI

 

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:16 Aug 2024, 09:21 PM IST
Business NewsIndustryBankingKarnataka govt pauses circular prohibiting 15-day hold on withdrawal of SBI, PNB deposits

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Tata Steel share price

    149.70
    07:18 PM | 1 NOV 2024
    1.05 (0.71%)

    Indian Oil Corporation share price

    145.00
    07:19 PM | 1 NOV 2024
    2.3 (1.61%)

    Tata Power share price

    445.20
    07:19 PM | 1 NOV 2024
    5.15 (1.17%)

    Bandhan Bank share price

    183.65
    07:10 PM | 1 NOV 2024
    1.4 (0.77%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Rainbow Childrens Medicare share price

    1,545.00
    06:59 PM | 1 NOV 2024
    -67.25 (-4.17%)

    ICICI Securities share price

    833.45
    06:59 PM | 1 NOV 2024
    -32.85 (-3.79%)

    Vijaya Diagnostic Centre share price

    966.70
    06:59 PM | 1 NOV 2024
    -30.35 (-3.04%)

    Narayana Hrudayalaya share price

    1,235.60
    06:59 PM | 1 NOV 2024
    -36.75 (-2.89%)
    More from Top Losers

    Brigade Enterprises share price

    1,244.80
    07:19 PM | 1 NOV 2024
    71.75 (6.12%)

    PCBL share price

    432.15
    07:17 PM | 1 NOV 2024
    21.35 (5.2%)

    Piramal Pharma share price

    281.85
    07:17 PM | 1 NOV 2024
    13.45 (5.01%)

    Jubilant Pharmova share price

    1,273.00
    06:59 PM | 1 NOV 2024
    60.65 (5%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      80,415.000.00
      Chennai
      80,421.000.00
      Delhi
      80,573.000.00
      Kolkata
      80,425.000.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.92/L0.00
      Chennai
      100.80/L0.00
      Kolkata
      104.95/L0.00
      New Delhi
      94.77/L0.00

      Popular in Industry

        HomeMarketsloanPremiumMint Shorts