Ex-branch manager among 4 arrested in IDFC First Bank fraud case

Haryana's State Vigilance and Anti-Corruption Bureau has arrested four people, including the alleged masterminds behind the Rs 590-crore IDFC First Bank fraud, with a private firm owned by the wife of a former employee emerging at the centre of the financial irregularities.

Two of the arrested are former employees of the IDFC First Bank, while the other two are private individuals who ran a partnership firm that allegedly received a substantial portion of the siphoned funds, officials said.

The arrests were made on Tuesday evening as part of the ongoing investigation into the fraud that has rocked the Haryana government's financial dealings.

 

Speaking to the media in Panchkula, State Vigilance and Anti-Corruption Bureau (SV&ACB) Director General A S Chawla identified the arrested individuals as Ribhav Rishi, Abhay Kumar, Swati Singla, and Abhishek Singla.

Rishi, who served as head of the bank's Sector 32 branch in Chandigarh until about six months ago, and Abhay Kumar, a relationship manager who resigned in August last year, have been described as "masterminds" of the fraud. According to investigators, the two allegedly orchestrated the diversion of government funds.

Swati Singla and her brother Abhishek Singla ran a firm named Swastik Desh Project. Swati holds a 75 per cent stake in the company, while Abhishek owns the remaining 25 per cent. Chawla revealed that Swati is Abhay's wife.

Nearly Rs 300 crore -- more than half of the total fraud amount -- was transferred into the account of Swastik Desh Project.

"This is the main private company into whose accounts most of the funds were transferred. According to the bank records, nearly Rs 300 crore was transferred, and later the money was moved further," he said.

Police had earlier issued a look-out circular (LOC) against Rishi to prevent him from fleeing the country, Chawla said.

Earlier, the ACB registered an FIR in connection with the fraud, while the state government also constituted a committee to probe it. A Special Investigation Team was constituted under the overall supervision of senior IPS officer Ganga Ram Punia, Chawla said.

On Tuesday, Chief Minister Nayab Singh Saini informed the Assembly that nearly Rs 556 crore, including Rs 22 crore in interest, has been recovered in the IDFC First Bank fraud case within 24 hours.

Responding to questions regarding the difference between the recovered Rs 556 crore and the total Rs 590 crore involved, Chawla said the remaining amount may include smaller accounts, possibly linked to the Chandigarh administration.

Chawla said the money trail investigation is complex and will take time. "We are hiring chartered accountants," he said.

When asked whether any Haryana government officials were under scrutiny, Chawla said the investigation was in the initial stage, and it would be inappropriate to comment.

Replying to another question, Chawla said, "It is surprising that the IDFC First Bank branch is in Chandigarh while the Haryana government departments are in state territory and the AU Small Finance Bank, where the money was transferred, has its branch in Mohali."  According to him, the IDFC Bank wanted to be a complainant in the case after a Haryana government committee detected the fraud, and the bank became aware of it.

"The bank wanted to lodge a complaint and approached the Chandigarh and Mumbai police. However, as the money belonged to the Haryana government, we decided to register the case here," Chawla said.

Private sector IDFC First Bank on Sunday disclosed a Rs 590-crore fraud committed by certain employees and others at a particular branch in Chandigarh in a specific set of Haryana state government accounts.

On Tuesday, Chief Minister Nayab Singh Saini said in the Assembly that the government will spare no one involved in the fraud.

Leader of Opposition Bhupinder Singh Hooda and Haryana Congress chief Rao Narender Singh have demanded a CBI probe in the matter.

Earlier, Saini, in the Assembly, said that the irregularities were primarily related to the bank's Chandigarh branch and involved alleged collusion at the middle and lower levels.

Acting on the directions of the Haryana government, the ACB lodged a case.

The case was lodged under Section 13 (2) of the Prevention of Corruption Act, and sections 316(5) (criminal breach of trust) 318(4) (cheating), 336(3) (forgery), 338 (forgery of valuable security), 340(2) (forged document) and 61(2) (criminal conspiracy) of the Bharatiya Nyaya Sanhita.

Prior to the registration of the FIR, a committee formed by the director of the development and panchayats department of Haryana recommended a police investigation after uncovering alleged forgery and procedural lapses involving officials from both IDFC First Bank and AU Small Finance Bank.

The committee was formed on February 11 to inquire into the matter related to IDFC Bank First accounts regarding "mismatch/issues."  The findings of the committee have been included in the FIR registered by the State Vigilance Anti-Corruption Bureau.

On February 18, the Haryana government officially de-empanelled IDFC First Bank and AU Small Finance Bank from participating in government business.

IDFC First Bank had said that the fraud is "confined to a specific group of government-linked accounts within the Haryana government operated through the said branch in Chandigarh", and stressed that it does not extend to other customers of the Chandigarh branch.

On Saturday, IDFC First Bank informed exchanges that it had received a request from a Haryana government department for the closure of its account at a Chandigarh branch and transfer of funds to another bank.

In the process, the bank observed differences in the balances in the account and the balances mentioned by the Haryana government department. The discrepancy observed was of Rs 490 crore, and an additional Rs 100 crore was identified by the bank, taking the total discrepancy amount to Rs 590 crore.