Clipped from: https://www.business-standard.com/india-news/kotak-bank-files-complaint-over-alleged-fd-fraud-in-panchkula-126032501264_1.html
Bank begins reconciliation of municipal deposits, says accounts followed due process; probe comes amid broader scrutiny of deposit irregularities in Haryana
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“The bank is cooperating fully with the Municipal Corporation, government authorities, and law enforcement agencies in this process,” it further said. (Photo: Shutterstock)
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Private sector lender Kotak Mahindra Bank on Wednesday said it has filed a formal complaint with the Panchkula Police (Haryana) following an alleged fraud involving fixed deposits (FDs) belonging to the Municipal Corporation of Panchkula. The bank said it is conducting a reconciliation of deposits and linked accounts, but it has not yet quantified the amount involved.
“Following instructions from the Municipal Corporation of Panchkula, Kotak Mahindra Bank initiated a detailed reconciliation of FDs and linked bank accounts maintained by the municipal corporation,” the bank’s spokesperson said in a statement.
“As part of this exercise, the bank has confirmed, based on records examined so far, that all account-opening processes, know-your-customer 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,” the statement added. “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.”
“The bank is cooperating fully with the municipal corporation, government authorities, and law enforcement agencies in this process,” it further said.
The development comes amid a separate fraud-related incident involving deposits of the Haryana government.
Recently, irregularities were reported at IDFC First Bank and AU Small Finance Bank, where discrepancies in certain deposit accounts triggered internal reviews. IDFC First Bank reconciled ₹645 crore with the Haryana state government following the discovery of a fraud at its Chandigarh branch last month. The issue surfaced after a government department sought to close its account with the bank and transfer the funds to another lender, but the amount reported by the department did not match the account balance.
According to IDFC First Bank, preliminary findings indicate that certain branch employees acted fraudulently in clearing forged instruments and payment instructions, possibly in collusion with external parties. The employees involved have been suspended, and the bank has appointed KPMG to conduct a forensic audit.
The disclosure followed a directive issued by the Haryana government on February 18, instructing its departments to close accounts held with private-sector banks—a move that triggered a chain of account-closure requests that exposed the discrepancies.
(Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd)
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