CHANDIGARH: Four people, including two former employees of IDFC First Bank, were arrested in connection with a scheme that siphoned nearly Rs 590 crore from government accounts in Haryana. The bank says it has repaid Rs 583 crore, even as investigators trace the flow of funds through a private company linked by family ties.
A Fraud Uncovered
The Haryana Vigilance Bureau this week arrested four people in connection with what officials describe as a Rs 590-crore fraud involving accounts held by government departments at IDFC First Bank. Among those taken into custody were two former bank employees — Ribhav Rishi, who until six months ago headed the bank’s Sector 32 branch, and Abhay Kumar, a former relationship manager who left his position around August last year.
Officials said the two had masterminded the scheme, allegedly clearing forged instruments and payment instructions to move large sums out of accounts maintained by departments of the Government of Haryana. Preliminary findings cited by the bank indicate that certain branch employees acted fraudulently, potentially in collusion with external parties.
The arrests followed the registration of a First Information Report by the state’s Anti-Corruption Bureau and the formation of a Special Investigation Team under the supervision of senior IPS officer Ganga Ram Punia. The state government also constituted a committee to examine the matter.
The alleged fraud came to light days before the arrests, when IDFC First Bank disclosed that irregularities amounting to Rs 590 crore had been detected in accounts linked to Haryana government departments.
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The Movement of Funds
Investigators say most of the diverted funds — nearly Rs 300 crore — were transferred into the account of a private company, Swastik Desh Projects. From there, the money was subsequently moved further, according to statements cited by officials.
“This is the main private company into whose accounts most of the funds — nearly Rs 300 crore — were transferred, and later the money was moved further,” A.S. Chawla, Director General of the state’s Anti-Corruption Bureau, was quoted as saying. Most of the funds, he added, belonged to Haryana government departments, though a small portion may have involved departments under the Chandigarh administration.
The company is owned by siblings Swati Singla and Abhishek Singla. Swati Singla, the wife of Abhay Kumar, holds 75 percent of the shares, officials said. Both she and her brother were arrested along with the two former bank employees. Authorities have described familial links among the four accused as a central thread connecting the alleged scheme.
The Bank’s Response
On Wednesday, IDFC First Bank issued a statement confirming that it had repaid the principal amount in its entirety to the Haryana administration. The bank said it had “immediately honored 100% of the principal and interest claimed” by the relevant government departments, amounting to Rs 583 crore. The final amount, the bank added, may change depending on further claims or reconciliation.
In its statement, the bank acknowledged that preliminary findings indicated that certain employees of the Sector 32 branch had acted fraudulently in clearing forged instruments and payment instructions, possibly in collusion with external parties. It did not specify how long the alleged activity had gone undetected or what internal controls were in place at the time.
The repayment, totaling Rs 583 crore, came even as the broader figure cited in connection with the fraud stood at Rs 590 crore.
A Broader Investigation
The arrests come amid ongoing efforts by state authorities to trace the full extent of the financial trail. Officials have indicated that most of the siphoned funds were routed through Swastik Desh Projects before being moved onward, though details of subsequent transfers have not been publicly disclosed.
The Anti-Corruption Bureau’s investigation is continuing under the oversight of the Special Investigation Team. Authorities have not yet detailed the specific charges each of the four accused will face, nor have they outlined a timeline for filing a chargesheet.
For the Haryana government, the episode has raised questions about the handling of departmental funds and the safeguards in place at financial institutions entrusted with public money. For the bank, the swift repayment appears aimed at limiting the immediate financial fallout, even as the criminal investigation proceeds.
As investigators work to piece together how forged instruments and payment instructions were processed and cleared, the case has drawn attention to the vulnerabilities that can arise when internal controls are allegedly breached from within.
Prof. Triveni Singh (Ex-IPS, banking fraud & cybercrime expert) has emphasized in broader discussions on banking/internal frauds that such incidents often stem from:
- Weak enforcement of maker-checker-authorizer protocols allowing single individuals to bypass dual approvals for high-value cheque clearances and debits.
- Inadequate real-time reconciliation and transaction monitoring for large/government accounts, where mismatches (e.g., funds not parked in intended fixed deposits) remained undetected despite alerts/SMS/statements.
- Poor branch-level supervision and segregation of duties, enabling insiders to exploit system knowledge for repeated fraud over months without triggering higher audits or risk flags.
- Insufficient oversight on high-value public fund handling, despite RBI guidelines, exposing gaps in governance and collusion detection.
These lapses mirror recurring issues in Indian banking frauds (e.g., bypassing core controls). Experts like Prof. Singh stress stronger internal vigilance, tech-driven monitoring, and prompt reporting to prevent recurrence.
