Karnataka Bank Leverages IT to Collect Taxes via Internet Banking

Karnataka Bank announced the enablement of the facility for payment of Government of Karnataka’s Khajane-2 e-receipts through its Internet Banking platform. The Government of Karnataka implemented ‘Khajane’ (referred to as K1) as an Information Technology (IT) platform for computerisation of treasuries from 2001. Since then the State government has been launching successive versions of the system. The Khajane 3 will be launched soon.

The Bank has received the necessary authorisation from the Reserve Bank of India (RBI) along with approval from the Department of Treasuries, Government of Karnataka, to collect State Government revenue receipts through the Khajane-2 Integrated Financial Management System (IFMS). With this enablement, Karnataka Bank now facilitates the collection of various State Government taxes and fees from citizens of Karnataka via its Internet Banking services.

IT Environment Readiness

According to figures published by the Comptroller and Auditor General and the Government of Karnataka, the Khajane-II portal processed over 1.9 crore challans in FY 2024-25, totaling approximately Rs. 1.14 lakh crore in payments by citizens and enterprises toward taxes, fees, and other state government receipts. These figures illustrate the deep penetration and revenue impact of the digital treasury system in the state’s financial ecosystem.

The Karnataka Bank had begun the preparation for implementing the system about three months in advance, informed Venkat Krishnan, Chief Information and Technology Officer (CITO), Karnataka Bank speaking exclusively with FE CIO. “About three months in advance, the Karnataka Bank had begun the preparation for initiating the system to enable payments through e-Khajane. The Bank used the sandbox environment created for doing the testing, with all the necessary security guardrails to ensure the system provides the visualised ease and security to the customers.”

The Bank had also prepared the ground for the launch of the facility by its ongoing Application Programming Interface (API) infrastructure rollout. 

“From an ecosystem perspective, the required API framework is also supporting the facility for receipts payment through e-Khajane. It ensures that all the data travelling through the facility is encrypted. The backend system is hosted on an on-premise virtualised environment,” said Krishnan.

When asked about the readiness of the facility for operating uninterruptedly during peak periods Krishnan said, “The payments to the state government peak during quarterly, half yearly and yearly ending and accordingly the system has been made resilient to handle the spurt in the filings. A Disaster Recovery (DR) setup is also in place to take over in case the primary site goes down.”

On the launch of this service, Raghavendra S Bhat, Managing Director and CEO said, “The launch of Khajane-2 e-Receipt marks a significant milestone in our digital transformation journey. This initiative is designed to provide a secure, real-time, and paperless receipt system, enhancing transparency, accountability, and efficiency in government transactions. By reducing manual processes and simplifying receipt management, Khajane-2 e-Receipt will offer greater convenience to citizens while strengthening the State’s digital payment ecosystem. We remain committed to supporting the Government of Karnataka in advancing transparent, technology-driven, and citizen-centric public service delivery.”