The Karnataka government on August 14 instructed all its departments, boards, corporations, public sector units, and universities to withdraw their deposits and investments from State Bank of India (SBI) and Punjab National Bank (PNB). This directive followed a financial dispute involving the Karnataka Industrial Area Development Board (KIADB) and the two banks.
The significant move by the government to order closure of all accounts in the public sector lenders caught everyone’s attention. Capital Mind Founder and CEO weighed in on the matter through a post on social media platform X (formerly Twitter), stating that the government’s decision is a prudent step. Shenoy pointed out that this action may be necessary to uncover any potential irregularities in the handling of government fixed deposits (FDs) by these banks.
Shenoy called for a thorough investigation saying “Karnataka govt tells all govt depts to shut down all deposits with SBI and PNB. This is a good thing.
Apparently, PNB hasn’t returned one FD for a decade, and SBI allowed a govt FD to be pledged against a private party’s loan and invoked it in default, so not paying back govt,” Shenoy wrote.
He further suggested that withdrawing all FDs could be a way to expose any other questionable practices. “How many more such shady loans have been taken against govt-owned FDs? One way to find out is to take out all FDs. If it is all clean, the money will come. Otherwise, you can ding the banks in courts.”