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Chandigarh: A massive fraud of around ₹590 crore involving government funds from several Haryana departments has been uncovered at the Chandigarh branch of IDFC First Bank, prompting arrests, account freezes and a multi-agency investigation.

The case came to light after discrepancies were detected in certain government accounts maintained at the bank. Following the discovery, the Haryana State Vigilance and Anti-Corruption Bureau registered an FIR on February 23, 2026. They constituted a Special Investigation Team (SIT) headed by senior IPS officer Ganga Ram Punia to probe the matter.

Modus Operandi

Investigators said the prime accused allegedly created several shell companies — including R S Traders, Cap Co Fintech Services, SRR Planning Gurus Pvt Ltd and Swastik Desh Project Pvt Ltd — to divert government funds into private accounts.

According to preliminary findings, 12 bank accounts linked to eight Haryana government departments were manipulated. Of these, 10 accounts were maintained at the Sector 32 branch of IDFC First Bank in Chandigarh, while two accounts were held at AU Small Finance Bank.

Officials said the funds were siphoned off through forged instructions, fake cheques and unauthorised internal transfers, indicating involvement of both bank insiders and external actors.

Arrests and Raids

So far, 11 people have been arrested, including six bank employees, four private individuals and one government official. Ten of the accused are in judicial custody, while one remains on police remand.

Among those arrested is Vikram Wadhwa, a Chandigarh-based street vendor in the 90s who turned real estate developer and hotelier, and who investigators say played a role in diverting funds.

Authorities conducted raids at 16 locations across Chandigarh, Mohali, Panchkula, Gurugram and Bengaluru, recovering key documents and seizing more than 25 electronic devices for cyber forensic analysis.

Investigators also confiscated six luxury vehicles, including three Toyota Fortuners, two Innovas and a Mercedes, suspected to have been purchased using the proceeds of the fraud.

Accounts Frozen, Properties Identified

Officials said more than 100 bank accounts linked to the accused and suspicious transactions have been frozen as part of the probe. The investigation is being conducted in coordination with the Enforcement Directorate to trace the flow of diverted funds and recover public money. Authorities have also identified 10 properties believed to have been acquired using the proceeds of the alleged scam.

Fraud Detected During Account Review

The irregularities reportedly came to light when one of the government departments attempted to close its account and transfer funds, revealing a mismatch between recorded balances and actual funds. Officials said the case has raised concerns about oversight mechanisms for government accounts held at commercial banks and has prompted scrutiny of similar accounts at other banks.

Bank’s Response

In a statement, IDFC First Bank said the fraud was limited to specific accounts at a single branch and did not reflect systemic issues across the bank. The bank said it is cooperating fully with investigating agencies and has initiated an internal review of account operations.

Probe Continues

Officials said the investigation is ongoing and further action is likely against additional government officials and private individuals once evidence is verified. The Haryana government has stated that it is committed to recovering the misappropriated funds and ensuring accountability for all those involved in the fraud.