Bengaluru-headquartered Canara Bank has drawn up a strategy and assigned a team of top officials to tap funds the Karnataka Government has decided to withdraw from the State Bank of India (SBI) and Punjab National Bank (PNB) to shore up its deposits.
“I held a detailed meeting with circle heads and regional heads, and we have drawn up a strategy. We see it as a business opportunity and want to respond quickly,” Canara Bank MD & CEO K Satyanarayana Raju told ET.
The government has set a deadline of September 20 for all its departments, universities, PSUs, local bodies and other government-run organizations to withdraw deposits made at the two banks and close the accounts over the alleged defaults of big-ticket term deposits by the banks.
Senior officials, in a chat with ET, estimated the government funds parked at SBI at about Rs 6000 crore. Estimates about the size of the funds parked at PNB were not immediately available.
“We have taken the decision to send a stern message to the two banks,” a senior government official told ET. Canara Bank has decided to pursue the opportunity as its officials have been engaged with the state government with the bank being the convenor of the state level bankers’ committee (SLBC).
“We have a long-standing relationship with the Karnataka Government and have been in touch with top officials. We have also been running many CSR initiatives for the State,” Raju said. Dr Ambedkar Vidya Jyothi Scholarship programme is one of them, he added.
“Our bank has always played its own role in the development of Karnataka. We have a long-standing bonding with the state and hence have much more responsibility towards it,” the Canara Bank MD said.
Top SBI officials, however, are persuading the State Government to withdraw its circular. The banking behemoth, in a statement, said it was in talks with the government to reach an ‘amicable resolution.’
“As the matter is currently sub judice, we are unable to provide any specific comments at this time. However, we remain in ongoing discussions with the Government of Karnataka to resolve the issue amicably,” SBI said.
The Finance department circular detailed how the Karnataka Industrial Areas Development Board (KIADB)failed to recover a deposit from PNB and the Pollution Control Board was denied a similar deposit by the SBI.
