Visuals from Panchkula showed a heavy police presence outside the bank branches, with staff reportedly being prevented from opening their own branch locks—an unusual and dramatic escalation in what has been a simmering dispute between the Haryana government and several private sector banks.
Operations have since resumed. Sources confirm that all Kotak Mahindra Bank branches are now open and functional. AU Small Finance Bank branches have also resumed normal operations. CNBC-TV18 has reached out to both banks for comment; responses are awaited.
The backdrop
This is not the first time Haryana’s banking dispute has made headlines. In February, the state government had de-empanelled AU Small Finance Bank and IDFC First Bank from conducting state government business, citing suspected unauthorised transactions in government accounts.
AU Small Finance Bank had, at the time, maintained that there was no evidence of any fraud. IDFC First Bank subsequently paid ₹645 crore to the Haryana government to settle its part of the matter.
Kotak Mahindra Bank had last week separately clarified that it was undertaking a reconciliation exercise at the request of the Panchkula Municipal Corporation, which had flagged similar irregularities in its deposit account.
Kotak pays up
Now, sources tell CNBC-TV18 that Kotak Mahindra Bank has paid approximately ₹120 crore to the Haryana government in connection with the Panchkula Municipal Corporation case, following in the footsteps of IDFC First Bank’s earlier settlement.
However, the payment does not mean the matter is closed. The investigation by Haryana authorities remains ongoing, and the larger question of accountability for the suspected unauthorised transactions is yet to be resolved.
CNBC-TV18 has reached out to Kotak Mahindra Bank and AU Small Finance Bank for comment. This story will be updated as responses come in.
