After IDFC First, Rs 160-Crore FD Fraud Hits Kotak Mahindra Bank In Haryana

A month after a Rs 590-crore fraud was detected at the Chandigarh branch of IDFC First Bank, the Panchkula Municipal Corporation has uncovered discrepancies in its Fixed Deposit Receipts (FDRs) with Kotak Mahindra Bank totaling nearly Rs 160 crore, a senior official said Tuesday.

It is alleged that these funds - deposited as Fixed Deposits (FDs) -were diverted into fraudulent accounts while the Haryana-based Corporation was issued forged paper records.

The scam surfaced when the Corporation requested the maturity proceeds of a Rs 58-crore FD be transferred into its account. While the bank statement indicated the transfer was complete, the funds never arrived. A subsequent investigation revealed the statement itself was counterfeit and the money had vanished.

All FDs issued by the bank in this instance were found to be fake, with no actual funds present in the account. It is alleged that bank employees concealed the embezzlement for an extended period using forged documentation.

"Some of the FDRs had been with the Panchkula branch for a long time. The discrepancy was found only when the bank was asked to transfer funds upon the maturity of one FDR," Vinay Kumar, Commissioner of the Panchkula Municipal Corporation, told PTI.

Further inquiries detected similar discrepancies in other FDRs, bringing the total involved to nearly Rs 160 crore. Authorities suspect the involvement of certain Municipal Corporation officials alongside bank employees.

The Commissioner confirmed the matter has been reported to State Vigilance. The Corporation has initiated an FIR against the bank and petitioned the Haryana Government to de-empanel the lender.

Haryana Chief Minister Nayab Singh Saini has ordered an investigation into the matter.

The bank, on its part, has initiated a detailed reconciliation of fixed deposits and linked bank accounts maintained by the Municipal Corporation.

"As part of this exercise, the Bank has confirmed, based on records examined so far, that all account opening processes, KYC documentation, authorised signatories and instructions received from the Municipal Corporation were in order, and that the accounts and transactions were handled in strict adherence to due process and applicable banking norms. A significant portion of the amounts under review has already been reconciled with the Municipal Corporation, and the reconciliation process is continuing in an orderly manner," spokesperson, Kotak Mahindra Bank, said.

The bank has also filed a complaint with the Panchkula Police. 

"In keeping with its governance standards and to ensure that the matter is examined independently and comprehensively, the Bank has filed a formal complaint with the Panchkula Police. The Bank is cooperating fully with the Municipal Corporation, government authorities and law enforcement agencies in this process," the spokesperson added.

This incident follows a similar fraud at IDFC First Bank involving Rs 590 crore from Haryana government-linked accounts. In that case, the private lender attributed the fraud to "unauthorised activities" by branch employees and has since reportedly repaid 100% of the claimed amount to the government.