A major breakthrough has been achieved in the IDFC First Bank scam that took place in February involving a Rs 590 crore scam. Investigations have revealed that the primary accused created multiple fake companies to divert government funds to several accounts in violation of the law. As many as 12 bank accounts linked to eight governmental departments have been involved in the fraud. Among these accounts, 10 were at the IDFC First Bank branch in Chandigarh, and the other two were at the AU Small Finance Bank.
Bank officials witnessed an ambiguous fund transfer, flagged their concern, and began monitoring the actions since February 18. Subsequently, an FIR was registered on February 23, 2026, against unknown officials of the IDFC First Bank and the AU Small Finance Bank.
What's the Rs 590 crore fraud case?
Funds belonging to several Haryana government departments were illegally transferred from official bank accounts by a group of individuals who ran a well-networked financial racket across Haryana. The group of accused reportedly used fake debit memos, forged bank documents, shell companies, and multiple bank accounts to transfer the funds. According to the investigators, the money was transferred from government department accounts maintained at IDFC First Bank and routed through shell companies they created. As a result, money was withdrawn without proper authorization and used to purchase expensive cars, electronic devices, and personal luxuries.
It was a routine account-closure request from a Haryana government department that blew the whistle on one of India's notable financial frauds. A simple balance-checking exercise revealed irregularities in fund transfers and evidence of shell companies involved in fund transfer. The warning initially came when a Governmental department requested that the bank close its account and transfer the funds to another account. The bank soon realized that the amount recorded by the department did not match its balance sheet.
The bank desperately tried to cover up the situation, but the investors responded with pessimism. Nearly 20% of the Shares of IDFC First Bank dropped on the Bombay Stock Exchange.
As of now, eleven people have been arrested by the investigators, including six bank employees, one government official, and four other individuals who were collectively involved in actualizing the scam. Of these, ten are in judicial custody, while one is on police remand.
The team of investigators conducted multiple raids at 16 locations and recovered documents showing the purchase of more than 25 electronic devices. The devices, which include mobile phones and laptops, have been seized and are currently with the forensic team for critical examination. The police have also seized three Toyota Fortuners, two Toyota Innovas, and one Mercedes that were purchased illegally. Additionally, 10 properties have been seized, suspected of having been purchased with these illicit funds.
