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Funds Diverted to Fake Firms and Invested in Shares
Chandigarh: In a major breakthrough in the ₹590 crore IDFC First Bank fraud involving Haryana government funds, the State Vigilance and Anti-Corruption Bureau has arrested four accused, including two former bank employees and two private individuals, as investigators uncovered a massive conspiracy in which government money was allegedly siphoned off through fake companies and invested in the stock market.
According to officials, the former branch manager of IDFC First Bank has emerged as the alleged mastermind of the fraud. The investigation has also reached senior administrative circles, with vigilance teams conducting raids at the residences of one IAS officer and one HCS officer as part of the widening probe.
Authorities revealed that funds belonging to at least 18 Haryana government departments were allegedly transferred to accounts of shell companies created using forged documents and benami entities. The accused then diverted the money into share market investments to generate profits and conceal the illegal transactions.
Fake Firms Opened in Names of Associates, Govt Funds Illegally Diverted and Withdrawn
Preliminary investigation indicates that the main accused, while serving as bank manager, allegedly opened multiple fake company accounts in the names of his associates and acquaintances. Government funds deposited in official accounts were then fraudulently transferred into these shell accounts using forged cheques, debit notes, and manipulated banking records.
Investigators suspect that the accused exploited his insider position and knowledge of banking systems to bypass safeguards and siphon off funds over an extended period. Large sums were subsequently withdrawn or diverted into stock market investments and other financial channels to obscure the money trail.
Officials said the fraud went undetected initially due to manipulation of internal records and possible collusion involving bank insiders and external entities.
Vigilance Probe Expands, Senior Officials Under Scanner; Govt Promises Strict Action
The arrests were made on Tuesday evening following an FIR registered by the Anti-Corruption Bureau. The Haryana government has also constituted a high-level committee to examine the fraud and identify lapses in financial oversight.
Chief Minister Nayab Singh Saini had earlier assured the Haryana Assembly that strict action would be taken against all those involved, including bank officials, private individuals, and any government employees found complicit.
The fraud came to light after IDFC First Bank disclosed that ₹590 crore had been siphoned from accounts linked to Haryana government departments. While a substantial portion of the funds has already been recovered, investigators are now focused on identifying the full network of beneficiaries and tracing investments made through fake companies.
Meanwhile, Leader of Opposition Bhupinder Singh Hooda and Haryana Congress chief Rao Narender Singh have demanded a probe by the Central Bureau of Investigation (CBI), alleging that the scale of the scam points to deeper systemic failures.
The case is now being treated as one of the largest banking frauds involving government funds in Haryana, with vigilance agencies expanding their investigation to uncover the full extent of the conspiracy and ensure accountability at all levels.
