The Rs 117-crore fraud in Chandigarh Smart City Limited (CSCL) and Municipal Corporation Chandigarh (MCC) funds through IDFC First Bank’s Sector 32 branch — the biggest and most brazen bank scam in the history of Chandigarh — is far from fully mapped.Senior MC officials have made clear that Rs 117 crore is only the initial estimate and that the actual fraud amount will be established only after a special audit by the Comptroller and Auditor General (CAG) — formally, the Director General of Audit (Central) — and full reconciliation of all accounts is completed.The Municipal Corporation has already submitted a preliminary report on the scandal to the Punjab Governor and Chandigarh Administrator Gulab Chand Kataria and will place the facts before councillors at a general House meeting scheduled for Wednesday.Governor Kataria has ordered a reconciliation of all accounts across MCC and the UT Administration to check for further misappropriation and has vowed to take the case to its logical conclusion — recovering every single rupee misappropriated and taking to task each and every person found involved, however high-ranking they may be.The arrest of former CSCL Chief Financial Officer (CFO) Nalini Malik and the joining of investigation by former Chief General Manager (CGM) of CSCL and MC retired Chief Engineer NP Sharma have already exposed the contours of a wider network of senior officials and private persons working in concert — with investigators now actively following the money trail to identify and net all those involved.First of its kind in ChandigarhSenior UT officials privy to the development confirmed to The Tribune that no fraud of this scale, gravity or complexity has ever been detected in the history of the Union Territory. The sophistication of the operation — involving fake fixed deposit receipts, fabricated bank statements, shell companies, an outsourced accountant allegedly working as an inside man, and suspected complicity at the highest levels of both the Smart City administration and the bank — sets it apart from anything Chandigarh has witnessed before.How it unfoldedThe fraud came to light not through any internal vigilance mechanism but through newspaper reports in February 2026 about similar financial irregularities in Haryana government funds at IDFC First Bank and AU Small Finance Bank. Taking immediate cognizance, MCC officials approached IDFC First Bank, Sector 32, to encash FDRs amounting to Rs 108.73 crore and transfer the balance from Account No. 99988877765 — a dedicated consolidation account opened at the time of CSCL’s closure in March 2025 — to MCC’s Punjab National Bank account. The bank’s response was devastating: the FDRs, officials were told verbally, did not appear in the bank’s system and were likely fake.These FDRs had reportedly been issued by Rishab Rishi, then branch manager of IDFC First Bank’s Sector 32 branch, during March-April 2025 — the very period when CSCL was being wound up and its records handed over to MCC.Cross-verification of the original bank statement received on February 24, 2026, with the statement dated April 22, 2025, handed over to MCC during the CSCL closure, revealed that 11 FDRs totalling Rs 1,16,84,01,664.37 — shown as live assets in the handover records — simply did not exist in the bank’s system. Multiple debit and credit entries in the April 2025 statement appear fake and suspicious. Three additional payment entries totalling Rs 8.22 crore — two in the name of CAPCO Fintech (April 11, 2025) and one in the name of Sunlive Solar System (September 1, 2025) — have no corresponding records in MCC files and are under investigation.On February 25, 2026, the Regional Head and Cluster Head of IDFC First Bank met senior MCC officials and formally confirmed that the April 22, 2025, bank statement and the 11 FDRs worth Rs 116.84 crore were fake and fraudulent. On the same day, the bank remitted Rs 1,21,14,82,833.37 to MCC’s PNB account. MCC has, however, categorically communicated to IDFC First Bank that this remittance is not to be treated as full and final settlement of its claims and that it expressly reserves all rights and remedies to recover any further amounts — principal, interest and unauthorised payments — pending completion of reconciliation and the CAG special audit.CAG special audit, reconciliation & police probeMunicipal Commissioner issued an order on March 16, formally requesting the Director General of Audit (Central), Chandigarh, to conduct a special audit of CSCL covering the period both before and after its closure, to establish the full extent of financial irregularities and loss to the government and MCC.Simultaneously, a departmental committee constituted under Joint Commissioner-I, MCC, which has already submitted a 13-page report on March 13, is conducting reconciliation of all CSCL and MCC accounts to arrive at the actual recovery figure towards principal, interest and any unauthorised payments. The complete committee report with all annexures has been handed over to the Chandigarh Police on March 16.Chandigarh Police are actively following the money trail to establish the complete chain of culpability and lay hands on all those involved.FIR and action takenFIR No. 02 dated March 9 was registered under Sections 318(4), 338, 336(3), 340(2), 61(2) and 316(5) of the Bharatiya Nyaya Sanhita (BNS) at the Economic Offences police station, Sector 17, Chandigarh, following a complaint by MCC to Chandigarh SSP on March 5. The MCC’s complaint had specifically flagged that the involvement of CSCL officials could not be ruled out. MCC has since placed the accountant and a superintendent under suspension and proposed disciplinary action against the Section Officer, Finance Department, Chandigarh.The arrests: Wider net emergingThe biggest arrest so far is that of Nalini Malik, former CFO of CSCL — the highest-ranking official in custody. A local court sent her to 14-day judicial custody on April 6, after her four-day police remand ended. Police allege she, in connivance with Anubhav Mishra, an outsourced accountant, and other officials of CSCL, MCC and IDFC First Bank, fabricated 11 FDRs amounting to Rs 116.84 crore in favour of the Municipal Commissioner, Chandigarh. Her counsel has denied the charges.Former CGM of CSCL and MC, retired Chief Engineer NP Sharma, has joined the investigation, though neither has been arrested yet. The probe is rapidly widening, with several other high-ranking officials and private persons under the scanner as investigators follow the money.The CREST scam: Same branch, same modus operandiA parallel fraud at the same IDFC First Bank, Sector-32 branch, involves the Chandigarh Renewable Energy Science and Technology Promotion Society (CREST). An FIR dated March 12 was registered on the complaint of the CREST CEO, involving a cheating of Rs 83 crore, originally against three IDFC First Bank officials — Ribhav Rishi, Abhay Kumar and Seema Dhiman.Three shell firms — CAPCO Fintech, RS Traders and Swastik Desh Project — were created to siphon funds exceeding Rs 75 crore lying in CREST’s bank accounts at the branch. Sukhwinder Abrol, Project Director of CREST, was arrested after an investigation established that a significant portion of the siphoned funds had been funnelled into his personal bank accounts and those of his relatives and associates. The three arrested bank officials were produced before a Chandigarh court on a production warrant for interrogation in both the MC and CREST fraud cases.Tricity engulfedThe Chandigarh scam sits at the epicentre of a regional epidemic of public fund fraud of alarming proportions.In Haryana, funds from eight government departments across 12 accounts — ten in IDFC First Bank and two in AU Small Finance Bank — were siphoned in an Rs 590-crore fraud, with the same shell firms used as in the Chandigarh case: RS Traders, CAPCO Fintech Services and Swastik Desh Project. An FIR was registered on February 23, and a Special Investigation Team was set up.Six luxury vehicles, including three Toyota Fortuners, were seized and over 100 bank accounts were frozen. About 15 people have been arrested. The Haryana government has now recommended a CBI probe, which, if authorised, could widen the scope to examine the role of senior bureaucrats. Names of some IAS officers are also under the scanner of investigating agencies.Barely had the IDFC First Bank shock subsided when a fresh scam surfaced in Panchkula Municipal Corporation’s accounts at Kotak Mahindra Bank, with a mismatch of over Rs 150 crore in MC and bank records. The MC had 16 FDs worth Rs 145.03 crore with a maturity value of Rs 158.02 crore. Discrepancies in bank statements triggered suspicion and led to the exposure of the fraud. Kotak Mahindra Bank agreed to return Rs 127 crore to MC Panchkula as the investigation deepened.The common thread across all these frauds is stark: fake FDRs, forged bank statements, shell companies, insider bank staff in connivance with public officials, and crores of public money systematically looted — while oversight mechanisms failed to detect the rot for months.Governor firm: Every penny to be recovered, every culprit nailedPunjab Governor and Chandigarh Administrator Gulab Chand Kataria, to whom MC has submitted its preliminary report, has responded with unequivocal resolve. He has ordered a comprehensive reconciliation of all accounts across MCC and the UT Administration to check if misappropriation has occurred elsewhere as well, and has reiterated absolute zero tolerance for corruption and financial misconduct.“The UT Administration has zero tolerance for corruption or financial misconduct of any kind. Every single rupee misappropriated from public funds will be recovered, and every person found involved — however senior or influential they may be — will be taken to task. This case will be taken to its logical conclusion without exception,” Kataria told The Tribune.TimelineMarch-April 2025: 11 fake FDRs worth Rs 116.84 crore allegedly issued by IDFC First Bank, Sector 32 branch manager Rishab Rishi, during the closure of CSCLMarch 28, 2025: CSCL merged with MCC; Nalini Malik part of the handover team; new IDFC Bank account shows a balance of only Rs 81.20 against the expected Rs 95.78 croreFebruary 2026: Haryana IDFC First Bank scam surfaces in newspapers; MCC takes cognizance and approaches IDFC BankFebruary 24: MCC receives original bank statement; cross-verification reveals fake FDRs and suspicious entriesFebruary 25: IDFC Bank Regional and Cluster Heads confirm FDRs are fake; bank remits Rs 121.14 crore to MCC PNB accountMarch 5: MCC writes to SSP UT Chandigarh seeking FIR registrationMarch 9: FIR registeredMarch 16: Special audit sought from DG Audit (Central); complete committee report given to policeApril 2: Former CSCL CFO Nalini Malik arrestedApril 4: NP Sharma, former CGM CSCL, joins the investigationApril 6: Nalini Malik sent to 14-day judicial custodyOngoing: Reconciliation, CAG special audit, police investigation, money trail probe