Kotak Bank in 160 crore FD fraud linked to Panchkula civic body

Kotak Mahindra Bank launched a major investigation after detecting irregularities in fixed deposits linked to the Panchkula Municipal Corporation. The issue came to light when the civic body asked the bank to transfer funds from a matured deposit, prompting officials to review old records and uncover mismatches that had remained unnoticed. The bank promptly filed an FIR and began reconciling all FD accounts to determine how the discrepancy occurred.

Reports suggested that the alleged fraud could involve around 160 crore, raising concerns about the scale of the irregularity. Despite this, Kotak Mahindra Bank’s stock showed only a minor movement, indicating that investors reacted calmly because the bank acted quickly. Analysts pointed out that the prompt filing of a complaint and immediate verification helped stabilise market sentiment even as questions grew about oversight and internal checks.

In its statement, Kotak Mahindra Bank said it began a detailed reconciliation as soon as the Municipal Corporation requested verification of its deposits. The bank reviewed account-opening documents, KYC papers, authorised signatures and past transactions, claiming that all appeared compliant with regulatory rules. It also stated that a large part of the disputed amount has already been traced, with the remaining verification still underway.

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Kotak files complaint, joins probe

The bank confirmed that it has lodged a formal complaint with the Panchkula Police to ensure a fair and thorough probe. Kotak added that it is cooperating fully with the Municipal Corporation, state administration and law-enforcement agencies. Officials believe the reconciliation will clarify whether the mismatch resulted from internal lapses, external manipulation or long-term procedural failures. The case has also prompted closer scrutiny of government-linked funds.

This development comes shortly after IDFC First Bank revealed a major discrepancy involving government-related accounts at its Chandigarh branch, further increasing concerns about fraud in public-sector transactions. That case pointed to gaps in financial monitoring systems and highlighted the need for stronger safeguards when handling government money.

IDFC First Bank said the mismatch surfaced when a government department requested closure of its account and transfer of funds, leading to the discovery of irregular entries. The bank later identified additional discrepancies, taking the total amount to 590 crore. It stressed that the problem affected only certain government-linked accounts, and regulators are now expected to tighten oversight and push for stronger audits of public-sector deposits after two major cases surfaced consecutively in Haryana.

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