Chandigarh/Panchkula: In a major development linked to the banking sector, the Enforcement Directorate (ED) has registered a money laundering case in connection with an alleged ₹150 crore fixed deposit (FD) fraud. The case is associated with the Panchkula branch of Kotak Mahindra Bank, where serious discrepancies have been flagged in municipal corporation deposits.
Probe Under PMLA Focuses on Fund Diversion
According to sources, the case has been registered under the Prevention of Money Laundering Act (PMLA). Preliminary findings indicate that municipal funds were allegedly diverted through unauthorized channels and later layered via multiple transactions to conceal their origin. Investigators suspect that public money may have been misused in a structured financial operation.
Agencies believe that the case may not be an isolated incident but part of a broader pattern of financial irregularities across the Chandigarh–Haryana region. In this context, transactions linked to IDFC First Bank and AU Small Finance Bank are also under examination, as investigators attempt to identify possible systemic lapses.
At the center of the probe are municipal deposits that were placed as fixed deposits for secure investment. However, initial scrutiny has revealed potential manipulation of these funds, with money allegedly routed through multiple accounts. This has strengthened suspicions of deliberate diversion followed by laundering to obscure the money trail.
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Multiple Banks Under Scanner, Collusion Angle Probed
Sources further indicate that investigators are examining the possibility of collusion between bank officials and external entities managing these deposits. If established, such involvement could significantly widen the scope of the case, pointing toward institutional lapses or coordinated misconduct.
The focus of the investigation is currently on tracing the flow of funds, identifying end beneficiaries, and determining whether transactions were deliberately structured to evade detection. Authorities are scrutinizing banking records, transaction histories, and linked accounts to reconstruct the financial trail.
Focus on Money Trail and Beneficiaries
Meanwhile, Kotak Mahindra Bank, in an official statement, said it is conducting an internal review of the matter in line with directions from the Panchkula Municipal Corporation. The bank has stated that it is fully cooperating with government authorities and law enforcement agencies as the probe progresses.
Experts note that such incidents raise serious questions about oversight mechanisms within the banking system, particularly in handling public funds. Any lapse in monitoring large institutional deposits can expose the system to significant financial risks and undermine public trust.
With the registration of the PMLA case, the ED is expected to intensify its investigation in the coming days. This may include seeking detailed transaction records, examining concerned individuals, freezing suspicious accounts, and identifying the broader network behind the alleged fraud.
Authorities are also exploring whether similar patterns of irregularities exist in other jurisdictions, which could point to a larger, organized financial network operating across multiple locations. The findings of this investigation are likely to have wider implications for regulatory compliance and banking governance standards.
