IDFC First Bank has proposed a full and final settlement of Rs 5.75 crore in the alleged Rs 117-crore Chandigarh Smart City Limited (CSCL)-Municipal Corporation Chandigarh (MCC) bank fraud case, while disputing the larger claim raised by the civic body on the basis of a special audit observation. The proposal, communicated to the MCC’s Chief Accounts Officer, marks a significant development in Chandigarh’s biggest financial scam.Official communications accessed by The Tribune show that the bank, in its letter, marked “Strictly without prejudice,” has remitted this amount, including interest of Rs 3.49 crore, to the MCC’s Punjab National Bank account via RTGS. It asserted that after accounting for transactions aggregating approximately Rs 94.20 crore, which it says were missed in the MCC’s computation, the residual liability works out to Rs 5.75 crore and not the significantly higher figure claimed by the corporation.The communications reveal that the MCC’s original demand stood at Rs 108.73 crore. The bank states that on February 25, 2026 — within days of the fraud coming to light — it had already remitted over Rs 111 crore to the MCC based on the principal amount reflected in the fixed deposit advice submitted by the MCC, and additionally paid interest of over Rs 9.30 crore on the same date in accordance with the rates specified in that FD advice. Together, the bank says it had already paid the MCC over Rs 121.14 crore by February 25, 2026.According to the bank, the fresh remittance of Rs 5.75 crore takes its total payout to approximately Rs 126.89 crore.The bank has, through detailed reconciliation documents annexed to its letter — a copy of which is with The Tribune — contested the MCC’s computation on multiple grounds, arguing that the Accountant General’s audit observation on which MCC’s claim is based did not take into account transactions aggregating to approximately Rs 94.20 crore.These include: five credit entries totalling Rs 46.26 crore transferred back from shell company Capco Fintech’s account to the CSCL’s account, which the bank says were missed; a payment of Rs 12.07 crore transferred from a CSCL account to the CSCL’s State Bank of India account on October 1, 2024; three credit entries of Rs 8.10 crore from Capco back to another CSCL account; and an amount of Rs 25.28 crore credited to the MCC’s account through a demand draft drawn from the account of Haryana Power Generation Corporation Limited (HPGCL) — a transaction the bank itself has notified as unauthorised and fraudulent, and for which it has separately repaid Rs 25.28 crore to the HPGCL.The bank concludes that the computation in the MCC’s recovery sheet is incorrect and does not include transactions aggregating to about Rs 94.20 crore, and that the net amount payable after proper reconciliation is Rs 5.75 crore — arrived at after accounting for unauthorised debits of Rs 94.97 crore, adding net fresh fund inflows to the MCC accounts between March 28 and April 5, 2025, of over Rs 20.22 crore, adding applicable interest, and deducting amounts already paid.The bank has stated that its reply shall not be construed as an admission of liability in any manner.\B\BThe bank’s settlement offer and the figures it has placed on record add a new and contentious dimension to the CSCL-MCC fraud probe, which is being investigated by the CBI following the Centre’s April 27 order on the recommendation of Punjab Governor and Chandigarh Administrator Gulab Chand Kataria.The figures also highlight the complexity of the money trail — with funds having moved through multiple CSCL accounts, shell entities, including Capco Fintech and Jattvibelive Solar System, as well as an HPGCL account, and back again.Reiterating his resolve in the matter, Kataria said the administration would not rest until every rupee of misappropriated public money was accounted for and recovered, and that no person found guilty would be spared regardless of their position or connections.The CSCL-MCC fraud was executed through a hidden bank account secretly opened at IDFC First Bank, Sector 32 branch in August 2024 — never reflected in any official record — through which funds were diverted to shell companies and the creation of 11 fictitious fixed deposits worth Rs 116.84 crore using forged FDR numbers. The fraud came to light in February 2026 after the MCC attempted to encash the FDRs. The CBI has already arrested former CSCL CFO Nalini Malik, prime accused and former bank branch manager Ribhav Rishi, bank officials Abhay Kumar and Seema Dhiman, and others. The federal agency has signalled more arrests are possible as it climbs further up the administrative ladder. Former CSCL Chief General Manager NP Sharma, already questioned extensively, remains under the scanner without arrest.