CHANDIGARH: In a significant investigation, four individuals, including two former employees of IDFC First Bank, have been apprehended for their involvement in a scheme that allegedly siphoned nearly ₹590 crore from government accounts in Haryana. The bank has stated it has already repaid ₹583 crore, while authorities continue to trace the funds, which appear to have flowed through a family-owned private company.
A Fraud Uncovered
The Haryana Vigilance Bureau recently arrested four suspects tied to what officials have termed a ₹590-crore fraud affecting accounts held by various government departments at IDFC First Bank. The arrests include Ribhav Rishi, the former head of the bank’s Sector 32 branch, and Abhay Kumar, a prior relationship manager who left his role in August of the previous year.
Authorities allege that Rishi and Kumar orchestrated the fraudulent operation, which involved the clearance of forged instruments and payment instructions designed to misappropriate significant sums from these government accounts. Initial reports from IDFC First Bank suggest that some branch employees may have acted in collusion with external parties to facilitate these transactions.
Following the registration of a First Information Report by the Anti-Corruption Bureau, a Special Investigation Team was established under the supervision of senior IPS officer Ganga Ram Punia. In response to the gravity of the situation, the Haryana government has also formed a committee to examine the incident comprehensively.
The Movement of Funds
Investigators revealed that approximately ₹300 crore of the siphoned funds were transferred into the account of a private company named Swastik Desh Projects. According to statements from officials, the funds were subsequently moved to other accounts from there.
A.S. Chawla, Director General of the Anti-Corruption Bureau, noted that Swastik Desh Projects is critically involved in this case, having received most of the diverted funds. He mentioned that the overwhelming majority of the misappropriated money belonged to departments within the Haryana government, although a smaller fraction might have connections to departments under the Chandigarh administration.
The company is run by siblings Swati Singla and Abhishek Singla, with Swati holding a 75% stake in the company. Authorities have revealed that both siblings were arrested alongside the former bank employees, emphasizing the familial ties that underpin the alleged misdeeds.
The Bank’s Response
In response to the unfolding situation, IDFC First Bank released a statement confirming that it had fully repaid the principal amount to the Haryana government. A total of ₹583 crore was honored, encompassing all principal and interest claims made by the relevant government departments. The bank indicated that this amount might vary based on any further claims or reconciliations.
The bank acknowledged in its statement that initial findings suggested certain employees at the Sector 32 branch acted wrongly, possibly in league with outside accomplices. However, it did not elaborate on how long these wrongful activities went unnoticed or the internal safeguards that were allegedly inadequate during this period.
A Broader Investigation
The arrests signal ongoing efforts by state authorities to uncover the full extent of the financial trail. Most of the diverted funds are believed to have passed through Swastik Desh Projects, but details regarding subsequent transfers remain undisclosed.
The investigation by the Anti-Corruption Bureau is still ongoing, overseen by the Special Investigation Team. Specific charges for each of the four individuals involved have not yet been detailed, and there is currently no timeline for the filing of any charges.
This incident has raised significant concerns for the Haryana government surrounding the management of departmental funds and the security protocols of financial institutions handling public money. For IDFC First Bank, the prompt repayment aims to mitigate immediate financial repercussions while a more in-depth criminal investigation is underway.
As investigators delve into the mechanics behind how forged documents were processed and approved, this case sheds light on potential vulnerabilities that can occur when internal controls are breached within an institution.
Prof. Triveni Singh, an expert in banking fraud and cybercrime, has pointed out in discussions on banking frauds that many similar cases arise from:
- Weak enforcement of maker-checker-authorizer protocols allowing individual employees to bypass necessary approvals for significant cheque clearances and debits.
- Insufficient real-time reconciliation and monitoring for large or government-related accounts, whereby discrepancies remained undetected despite alerts and notifications.
- Poor branch-level oversight and duty segregation, allowing insiders to exploit their knowledge of the system, facilitating repeated fraudulent activities without scrutiny.
- Inadequate governance on high-value public fund handling, which exposes institutions to risks of collusion and fraud, despite existing RBI guidelines.
These systemic failures reflect recurring themes in the landscape of Indian banking fraud. Experts like Prof. Singh emphasize the need for stronger internal safeguards, technology-driven monitoring, and timely reporting to deter future occurrences.
