Kotak Mahindra Bank has reportedly filed a complaint in connection with an alleged ₹150 crore irregularity involving deposits linked to the Municipal Corporation of Panchkula, even as multiple agencies have begun probing the matter.

The issue pertains to fixed deposits and related accounts where funds are suspected to have been siphoned off using forged documents and fake entries, according to media reports.

Preliminary findings suggest that bank officials, along with external entities, may have been involved in creating fake fixed deposit receipts and diverting funds into unauthorised accounts.

The matter came to light when the municipal body attempted to access maturity proceeds and found discrepancies between actual balances and records.

Bank says processes intact

Kotak Mahindra Bank has maintained that its KYC and internal processes are in compliance, and that it is currently reconciling the accounts to trace the funds.

“Based on records examined so far, all account opening processes, KYC documentation, authorised signatories and instructions received from the Municipal Corporation were found in order, and that the accounts and transactions were handled in strict adherence to due process and applicable banking norms. 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,” Kotak Mahindra Bank spokesperson said in response to media queries.

The statement added, “Further, in keeping with its governance standards and to ensure that the matter is examined independently and comprehensively, the Bank has filed a formal complaint with the Panchkula Police. The Bank is cooperating fully with the Municipal Corporation, government authorities, and law enforcement agencies in this process.”

The shares of Kotak Mahindra Bank ended 0.97% higher at ₹370.40 apiece on the national stock exchange on Wednesday. The bank's stock has slipped over 14% during the past year, underperforming the benchmark Nifty Bank that has risen close to 4% during the same period.