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Canara Bank in talks with Karnataka Govt to take over government business from SBI and PNB


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Recently, the Karnataka Government has ordered all the government departments to close their accounts with SBI (State Bank of India) and PNB (Punjab National Bank). Click here to read why Karnataka ordered to close all govt accounts in SBI and PNB.

SBI has around Rs.6000 crore of government business in Karnataka. As soon as the order was released by Karnataka Government, the other banks started to make plans to take over government business from SBI.

Bengaluru-headquartered Canara Bank has devised a strategic plan and appointed a dedicated team of senior officials to capitalize on the Karnataka Government’s decision to withdraw its deposits from State Bank of India (SBI) and Punjab National Bank (PNB). This initiative aims to bolster Canara Bank’s deposit base.

Strategy and Business Opportunity

Canara Bank’s Managing Director and CEO, K Satyanarayana Raju, highlighted the proactive approach taken by the bank. “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,” Raju said. This move is in response to the Karnataka Government’s directive to all its departments, universities, public sector undertakings (PSUs), local bodies, and other government-run organizations to withdraw their deposits from the two banks by September 20 due to alleged defaults on large term deposits.

Government’s Stand

A senior government official explained the rationale behind the directive, stating, “We have taken the decision to send a stern message to the two banks.” This decision has presented Canara Bank with a significant opportunity, as its officials have been actively engaging with the state government. The bank holds the position of convenor for the State Level Bankers’ Committee (SLBC).

Canara Bank’s Commitment to Karnataka

Raju emphasized Canara Bank’s long-standing relationship with the Karnataka Government, stating, “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.” One notable initiative is the Dr. Ambedkar Vidya Jyothi Scholarship programme. “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,” Raju added.

SBI’s Response

Top officials from SBI are attempting to persuade the State Government to reconsider its decision. The banking giant, in a statement, mentioned ongoing discussions with the government to find an ‘amicable resolution.’ SBI stated, “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.”

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