₹590 crore IDFC First Bank fraud busted, ex-manager led siphoning of govt funds

In a major breakthrough in the ₹590-crore fraud at IDFC First Bank, the Haryana State Vigilance Bureau has arrested four accused, including an alleged mastermind who is a former bank manager, for siphoning off government funds through fraudulent transactions.

Those arrested have been identified as Ribhav Rishi, Abhay Kumar, Swati Singla and Abhishek Singla. Two of the accused are former officials of IDFC First Bank, while the other two are private individuals running a partnership firm, investigators said.

The fraud surfaced at the bank’s Chandigarh branch after authorities detected that nearly ₹590 crore had allegedly been diverted through unauthorized transactions from accounts linked to Haryana government departments.

Funds parked under housing scheme diverted

According to the probe, two accounts were opened in September 2025 at IDFC First Bank and AU Small Finance Bank under the Mukhya Mantri Gramin Awas Yojana-2.0 scheme. An amount of ₹50 crore was deposited in IDFC First Bank, while ₹25 crore was parked in AU Small Finance Bank.

The funds were meant to remain untouched pending further government approval.

Irregularities came to light in January when authorities ordered closure of the accounts and transfer of funds, along with accrued interest, to another bank. While AU Small Finance Bank transferred ₹25.45 crore and closed the account, IDFC First Bank remitted only about ₹1.27 crore instead of ₹50 crore plus interest.

The glaring shortfall triggered alarm bells, prompting a deeper investigation that eventually exposed what officials described as a “systematic and large-scale diversion” of public funds.

₹583 crore returned, banks de-empanelled

In its latest statement, IDFC First Bank said that approximately ₹583 crore — fraudulently transferred by certain employees — was returned to the Haryana government within 24 hours of the matter coming to light.

Haryana Chief Minister Nayab Singh Saini informed the Assembly that the full amount, including interest, had been recovered through coordinated efforts between the state government and banking institutions.

Following the scandal, the Haryana government has de-empanelled IDFC First Bank and AU Small Finance Bank from handling government business.

Opposition demands CBI probe

The Opposition has demanded a probe by the Central Bureau of Investigation, alleging serious lapses and possible wider complicity.

The Vigilance Bureau has said investigations are ongoing to fix accountability, examine internal controls within the banks, and trace any remaining financial trail linked to the fraud.

The case has raised serious questions about safeguards around public funds and oversight mechanisms in government-linked banking transactions.