Kotak Mahindra Bank Case: In a major development involving an alleged fraud linked to the Kotak Mahindra Bank, the Enforcement Directorate has initiated a preliminary probe pertaining to the case.
Kotak Mahindra Bank is facing an alleged Rs 150-160 crore fraud linked to Panchkula Municipal Corporation with missing FDs, fund diversion and possible collusion under vigilance probe.
According to ET NOW sources, funds kept as fixed deposits with tbank reported missing during withdrawal attempt. The private sector lender said that a significant portion of amount is already reconciled.
ED initiates preliminary probe
- Trigger believed to be inputs from regulatory/surveillance agencies.
- Focus on large-value FDs and linked transactions across accounts.
- Officials may examine role of intermediaries.
- Bank records and KYC details sought as part of initial probe.
What's the case?
- Panchkula Municipal Corporation officials unable to locate Rs 58 crore FD on maturity
- Further checks reveal discrepancies of over Rs 150 crore in accounts
- Allegations of diversion of funds to fraudulent accounts
- Fake documents and account statements suspected to have been used
- Possible collusion between bank officials and external entities under probe
- Haryana government orders vigilance investigation into the matter
- Case likely to be probed by State Vigilance & Anti-Corruption Bureau
- FIR process initiated, accountability to be fixed based on findings
Kotak Mahindra Bank to ET NOW:
- Kotak Mahindra Bank initiated reconciliation of fixed deposits and linked accounts of Panchkula Municipal Corporation
- Action follows directions from Municipal Corporation of Panchkula
-Records reviewed show account opening, KYC and authorised signatories in order
-Instructions from Municipal Corporation found compliant with banking norms
-Accounts and transactions handled as per due process and regulatory requirements
-Significant portion of amounts already reconciled
-Reconciliation exercise continues in an orderly manner
-Formal complaint filed with Panchkula Police for independent probe
-Move aimed at comprehensive examination under governance framework
-Bank is Cooperating with Municipal Corporation, government authorities and law enforcement agencies.
Subsidiary development
Separately, Kotak Mahindra Bank's subsidiary, Kotak Mahindra Prime Limited, has approved the appointment of Suraj Rajappan as Managing Director and CEO for a three-year term starting June 1, 2026. He will replace Shahrukh Todiwala, who retires at the end of May.
The subsidiary's board has also approved an increase in its borrowing limit from Rs 43,000 crore to Rs 48,000 crore. The higher limit will support funding through loans, debentures and other instruments.
IDFC First Bank Case
The latest development comes weeks after another private lender, IDFC First Bank, recently disclosed a Rs 590 crore fraud committed by certain employees and others at a branch in Chandigarh in a specific set of accounts held by the Haryana government.
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