Srinagar: The Economic Offences Wing (EOW) of the Jammu & Kashmir Crime Branch has arrested five employees of an HDFC Bank branch in Shopian in connection with a suspected multi-layered financial irregularity. Investigators conducted simultaneous searches at multiple locations across south and central Kashmir, seizing digital logs, banking server data, KYC documents and other electronic evidence. Preliminary findings indicate possible manipulation within the bank’s internal systems, prompting a detailed forensic probe.
The case surfaced following a written complaint alleging large-scale tampering with accounts and transactions at the branch. On the directions of the Police Headquarters, the matter was transferred from the local police station to the Crime Branch’s EOW for a specialised financial and technical investigation.
FIR under BNS and IT Act
According to officials, FIR No. 30/2025 has been registered at the EOW police station under relevant provisions of the Bharatiya Nyaya Sanhita (BNS) and the Information Technology Act. The arrests were made after an examination of financial records, transaction histories, user access logs and internal audit trails.
Investigators suspect the irregularities were not the result of a single error but part of a structured and layered manipulation, with distinct roles assigned to different individuals within the branch’s operational framework.
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Digital access and account alterations under scrutiny
The probe is focused on determining whether:
- Unauthorised modifications were made to customer accounts
- Digital banking credentials were misused
- Suspicious transactions were concealed from internal monitoring systems
A forensic team is analysing server logs, IP addresses, login patterns and KYC update histories to establish the timeline, access points and method of the alleged manipulation.
Searches in Shopian and Budgam
EOW teams carried out coordinated searches in Shopian and Budgam to trace the flow of funds and identify the destination of the allegedly diverted money. Officials are examining whether the activities were confined to the Shopian branch or extended to linked accounts, external beneficiaries or a wider network.
Questions over internal controls
The case has raised serious concerns about the effectiveness of internal controls, risk management and compliance mechanisms at the branch level. Investigators are reviewing how the alleged irregularities went undetected for an extended period and whether there were lapses in supervisory oversight.
Banking experts note that insider-driven financial crimes typically require strong real-time monitoring, dual authorisation protocols and independent audit systems to prevent and detect misuse.
Possibility of a multi-layered fraud
While the total amount involved has not been officially disclosed, officials say the complaint points to systematic financial manipulation. Given the suspected misuse of digital banking infrastructure, provisions of the IT Act have also been invoked.
The Crime Branch has not ruled out further arrests, stating that the next phase will focus on identifying beneficiaries, mapping the end-use of funds and establishing any external linkages.
Court production and next steps
The arrested employees will be produced before a competent court, where the investigating agency is expected to seek custodial remand for detailed interrogation and recovery of additional evidence based on digital records.
Officials said the investigation will proceed through forensic analysis of banking servers, examination of related accounts and coordination with regulatory and financial institutions.
Wider implications for banking oversight
The episode has underscored the need for stronger internal audits, tighter access controls and real-time transaction monitoring across banking institutions in the region. Experts warn that insider-linked financial irregularities can directly impact depositor confidence and institutional credibility.
The EOW reiterated that the probe is ongoing and further details will be shared once facts are formally established, emphasising its commitment to safeguarding the integrity of the financial system and ensuring accountability.
