MCG shuts IDFC account, moves s 108 crore to public sector bank

Gurgaon: MCG has closed its account with a private bank in the wake of a banking fraud.The civic body withdrew Rs 108 crore from IDFC First Bank and transferred the funds to a public sector bank (PSB) amid concerns over the alleged Rs 590-crore fraud involving govt deposits at the private bank, officials said.
The civic body's decision came after the matter was raised in the Haryana assembly, triggering political and administrative alarm over financial controls and public money safeguards. MCG officials said the corporation reviewed its arrangements and chose to close its account with IDFC First Bank as a precautionary move.An MCG official said, "We secured the funds that were generated from the sale of MCG land and — in accordance with the latest policy — they will be deposited into the ULB's account, which mandates that proceeds from the sale of municipal land be credited directly to the ULB account." The MCG generated revenue of Rs 54 crore from interest on bank deposits or FDs in the last FY. The current FY's projections stand at Rs 45 crore from interest on bank deposits.The alleged fraud first came to light when IDFC First Bank's Chandigarh branch detected discrepancies amounting to approximately Rs 590 crore in accounts linked to various Haryana govt departments during routine closure and reconciliation processes. The bank suspended four officials pending investigation and filed complaints with the police and regulators.In response, the Haryana govt de-empanelled IDFC First Bank and AU Small Finance Bank for govt business and mandated that all departmental accounts in private banks be closed or transferred to nationalised lenders. An FIR was registered by the state's anti-corruption bureau and vigilance department, while a high-level probe was ordered by chief minister Nayab Singh Saini, who pledged strict action against anyone found culpable. Saini on Tuesday informed the state assembly that the govt has recovered nearly Rs 556 crore.