Chandigarh, Oct. 1 -- The Panipat deputy commissioner (DC) suspended the sarpanches of gram panchayats Bal Jattan and Khandra after inquiring into the creation of fixed deposits (FDs) worth Rs.224 crore in private sector banks without the competent authority's approval. The DC also recommended de-empanelment of the involved banks. HT on September 17 reported the alleged irregularities in how the two Panipat panchayats, Bal Jattan and Khandra, handled public funds and deposited them in private sector banks without approval. Official documents showed the funds were deposited in four private sector banks, one public sector bank, and one co-operative bank. The violation was striking, occurring against the backdrop of the multi-crore IDFC First Bank financial scandal that shook the Haryana government earlier this year. As per two separate September 29 communications sent by the Panipat DC, Harish Vashist, to additional chief secretaries of finance and development and panchayats departments, the two sarpanches - Surender Rathi of Bal Jattan gram panchayat and Sonia of Khandra gram panchayat - were placed under suspension under Section 51 of the Haryana Panchayati Raj Act on September 28. Gram sachiv of Bal Jattan and Khandra, Manish Kumar, a government employee, was placed under suspension on September 17 under Section 7 of Haryana Civil Services (Punishment and Appeals) Rules. The September 29 communications said that show cause notices were issued to the two sarpanches and they were given an opportunity of personal hearing. After consideration of their replies and taking into consideration an inquiry done by Panipat additional DC, the two sarpanches were placed under suspension. As per official documents, the two panchayats, Bal Jattan and Khandra, had received a hefty amount of about Rs.277 crore and Rs.106.44 crore respectively from the sale of panchayat land to Indian Oil Corporation Limited (IOCL). About 124 acres of panchayat land was sold to IOCL by Bal Jattan gram panchayat while Khandra gram panchayat sold about 56 acres to IOCL for a combined sum of Rs.383.45 crore, the amount being received in the saving bank accounts of the gram panchayats in the Punjab National Bank (PNB). Official records showed that the funds were subsequently placed in multiple fixed deposits (FDs) with a number of private sector banks and FD receipts were created without the prior approval of the competent authority, a requirement made mandatory by the finance department on May 18, 2026, after the misappropriation of public funds in the IDFC First Bank episode. The Bal Jattan funds were placed in multiple FDs in July 2026 and Khandra panchayat funds were placed in FDs in July, August and September 2026. The district administration had also issued show cause notices to the district development and panchayat officer, Rajesh Kumar, and block development and panchayat officer, Matlauda, Vishal. However, no further action has been taken against them. The inquiry conducted by the Panipat additional DC noted that the banks could not satisfactorily explain as to why the FDs were created without the approval of the DC and why they failed to approach the DC office to seek permission in line with finance department's directions. The DC in his letter to the ACS, finance, has recommended that the four private sector banks be de-empanelled. The DC wrote that all the banks have given in writing that if the existing FDs were prematurely cancelled, then there will be total loss of interest from the date of making the FDRs to till date. "All the concerned banks had made the existing FDs as non-callable (except four) at their own level without seeking the permission of the competent authority,'' the DC wrote. A non-callable FD is locked till maturity with no early withdrawal option. The DC further wrote that banks failed to explain the reason why they had made the existing FDRs in favour of sarpanch and DC without the signature/consent of the undersigned. "Apart from this, they also failed to explain why some of the existing FDs had been made in favour of sarpanch only even after the resolution passed by the gram panchayat containing the name of sarpanch and the DC," the letter said. It further said all the existing FDs have now been made jointly in the favour of sarpanch and the DC. A high-level committee led by ACS finance to review the state banking policy and unauthorised fund transfer was set up after the IDFC First Bank scandal had on May 18, 2026, recommended that quotations for FDs should be invited from all the empanelled banks and a comparative statement be prepared by the senior most accounts officer posted who will make recommendations in accordance with the prescribed guidelines and the proposal shall be approved by the head of the office. Documents showed that Bal Jattan gram panchayat placed 16 FDs with various banks aggregating to Rs.264.96 crore. Of this amount, 10 FDs were placed in private sector banks at varying interest rates ranging from 6.50% to 7.40%. In fact, the variation in the interest rates at which some of the FDs were booked in one particular private sector bank ranged between 7% to 7.30%, as per official documents. Similarly, out of nine FDs created in various banks by Khandra gram panchayat for a total amount of Rs.101.81 crore, five were placed in private sector banks....