Kotak Mahindra Bank shares dropped nearly 4% on Monday, March 30, after the lender's clarification regarding the alleged Rs 160-crore fixed deposit fraud linked to Panchkula Municipal Corporation.
The shares touched a 52-week low of Rs 351.65 apiece, down 3.96%. The scrip was trading 2.23% down at Rs 358 at 12:35 pm. The benchmark NSE Nifty 50 was down 1.3%.
In an exchange filing on Friday, March 27, Kotak Mahindra Bank said, "there is no material impact" in terms of the SEBI provisions and the lender is following instructions from the Municipal Corporation of Panchkula.
"The Bank has informed and is cooperating fully with the Municipal Corporation, government authorities and law enforcement agencies in this process," the filing read.
Haryana State Vigilance and Anti-Corruption Bureau arrested two people in connection with the alleged discrepancies, PTI reported.
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Dileep Kumar Raghav, who served as the relationship manager in the bank during the alleged fraud, was the first to be arrested on Wednesday. Another accused, Rajat Dahra, was arrested late Thursday night.
According to the report, preliminary investigation showed Raghav conspired with others and sent false reports to Panchkula Municipal Corporation about the fixed deposits, leading to serious discrepancies in the records.
A Panchkula court sent Dileep Kumar Raghav to four-day police custody on Thursday.
"Accused Rajat Dahra has been arrested in Kotak Mahindra Bank case. He has disclosed that he received more than Rs 60 crore from an account number...with effect from May 29, 2020 and another account with effect from October 1, 2022 till 2025. He allegedly transferred this money to many other accounts which are being investigated," the report quoted a statement.
The municipal corporation earlier reported a multi-crore mismatch in its official records reflected in Kotak Mahindra Bank's Panchkula branch.
Meanwhile, a Kotak Mahindra Bank spokesperson, in a statement on Wednesday, said the bank has conducted a detailed reconciliation of fixed deposits and linked bank accounts maintained by the municipal corporation, based on the records examined so far. The State Vigilance and Anti-Corruption Bureau (SVACB) had filed an FIR on charges such as cheating, conspiracy against unnamed bank officials and others.
The development came after the Haryana government decided to refer the case to the SVACB to lodge an FIR "in the matter pertaining to non-reconciliation of funds and for conducting a thorough investigation into the discrepancies related to the FDRs of Panchkula Municipal Corporation, as well as the bank accounts maintained with Kotak Mahindra Bank at Sector 11, Panchkula," the report said.
The case was filed at the Anti-Corruption Bureau police station in Panchkula, under Sections 316(5) (criminal breach of trust), 318(4) (cheating), 336(3) (forgery), 338 (forgery of valuable security, will, et cetera), 340 (forged document or electronic record), and 61 (criminal conspiracy) of the Bharatiya Nyaya Sanhita and under Sections 13(2) and 13(1)(a) of the Prevention of Corruption Act, 1988.
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