Gurugram: Haryana Police on Monday stationed personnel outside several Kotak Mahindra Bank branches across the state, shutting them for hours, after the bank allegedly refused to cooperate with an ongoing fraud investigation.
Police personnel were also stationed outside AU Small Finance Bank branches.
By evening, the bank had transferred Rs 127.27 crore into the Panchkula Municipal Corporation’s accounts—money that investigators say was part of a Rs 160 crore fixed deposit “fraud”.
Bank staff were turned away at branches in Panchkula, Panipat, Sonipat, Yamunanagar and Bhiwani, it is learnt.
A senior police officer told The Print the banks had been stonewalling the Anti-Corruption Bureau’s probe, leaving the police with little choice but to camp outside.
Once the bank agreed to hand over records and cooperate with the ACB, the police personnel were pulled back.
A Kotak Mahindra Bank spokesperson told ThePrint certain “discrepancies” had surfaced during the reconciliation exercise of fixed deposits and linked bank accounts held by the Municipal Corporation of Panchkula. He said the bank has deposited Rs 127 crore with the civic body.
Midnight note from CM’s office
Around midnight Monday, Haryana Chief Minister Nayab Singh Saini’s media coordinator Ashok Chhabra sent out a note in Hindi, describing the day’s events as the outcome of the CM’s “sakht rukh”, or firm stance.
The note listed the recoveries—Rs127.27 crore from Kotak Mahindra Bank by the Panchkula Municipal Corporation, Rs 25 crore returned by AU Small Finance Bank to the Haryana Power Generation Corporation (HPGCL), and all dues from IDFC Bank already settled.
“No amount of the Haryana government is now outstanding in any bank,” the note said.
Asked what exactly the “sakht rukh” involved, Chhabra was direct. “Police had been deployed at Kotak Mahindra Bank branches across Haryana on Monday, and within hours the bank had deposited the money,” he told ThePrint.
The CM, he said, had made clear that public money would not be allowed to be siphoned off. The note quoted Saini as saying that “protecting public money is the government’s duty,” and that his government would take every step necessary under Prime Minister Narendra Modi’s guidance.
How the ‘fraud’ unfolded
The Panchkula Municipal Corporation had placed 16 fixed deposits totalling Rs 160 crore with Kotak Mahindra Bank and AU Small Finance Bank. When 11 of those FDs, totalling Rs 59.58 crore, matured on 16 February this year, the corporation found that the bank’s records bore no resemblance to its own.
One account that should have had Rs 50.07 crore had just Rs. 2.18 crore in it. The bank told the corporation that no FDs were active at all, and that total balances across accounts amounted to only Rs 12.86 crore.
Investigators say bank employees had been sending the corporation forged renewal documents every time the deposits were due, so that officials never questioned the arrangement.
Two additional accounts had been quietly opened using the corporation’s original paperwork, and funds were steadily moved out to private accounts. A bank relationship manager, Dilip Kumar, and one Rajat Dagar have been arrested.
Investigators say Rs 70 crore passed through Dagar’s account before he transferred it to builders and other private parties.
Before the “fraud” was caught, a bank employee had approached the corporation offering higher interest rates to roll the money into fresh FDs, an attempt, investigators believe, to buy more time. This time, officials did not bite.
What the bank says
Contacted by The Print, a Kotak Mahindra Bank spokesperson said in a written response on Wednesday that discrepancies had surfaced during the reconciliation exercise of fixed deposits and linked bank accounts held by the Municipal Corporation of Panchkula.
“Certain discrepancies have been identified that may affect both the Bank and the Municipal Corporation and are currently under examination,” the spokesperson said.
The bank said it has deposited Rs 127 crore with the Municipal Corporation while the investigation continues, describing the move as consistent with its long-standing relationship with government institutions.
The spokesperson added that the bank’s operations remained unaffected. “The Bank continues to operate normally and there is no impact on customer services,” the statement said.
Kotak Mahindra Bank and the Municipal Corporation said they were working closely with the relevant authorities to establish the facts and address the matter appropriately.
The bank did not elaborate on the nature of the discrepancies, when they were first detected, or what prompted the reconciliation exercise.
ACB gets more muscle
The Haryana government, meanwhile, has also posted seven new officers to the ACB—two Indian Police Service and five Haryana Police Service officers—as banking fraud cases pile up.
In his orders dated 29 March, which don’t cite any reason for the additional personnel, DGP Ajay Singhal has given these officers to the bureau.
STF SP Wasim Akram and CID SP Upasna are among the IPS officers joining the bureau, along with five HPS officers including DSP Arvind Dahiya, ACP Rahul Dev, DSP Manish Sehgal, ACP Priyanshu Dewan and ACP Abhilaksh Joshi.
(Edited by Ajeet Tiwari)