Two more Haryana government officials have been arrested in connection with a Rs 597 crore IDFC First Bank fraud case, bringing the total number of accused in custody to 14 as investigations into the large-scale siphoning of state funds continue.

Government Officials Arrested in Major Bank Fraud Investigation

The Haryana State Vigilance and Anti-Corruption Bureau has arrested two additional government officials in connection with the alleged Rs 597 crore IDFC First Bank fraud case, underscoring the involvement of public servants in the conspiracy. The arrested officials are Randhir Singh, controller of finance and accounts with the Haryana School Education Project Council, and Rajesh Sangwan, controller of finance and accounts at the Haryana State Agricultural Marketing Board. Both officers were arrested and subsequently produced before a Panchkula court, which granted the Vigilance Bureau four days of police remand for further investigation and interrogation. Their arrests mark a significant development in the ongoing probe that has already led to the apprehension of multiple bank employees, private individuals, and public servants suspected of orchestrating the large-scale fraud.

Conspiracy and Alleged Violations

According to the investigating authorities, both newly arrested officials allegedly played a key role in the conspiracy with other accused persons. The Vigilance Bureau claims that Singh and Sangwan violated instructions issued by the Haryana finance department from time to time and conspired with other accused to siphon off government funds earmarked for various state schemes and programs. The bureau has alleged that both officers actively participated in committing the offence and accepted substantial amounts as illegal gratification in exchange for their cooperation. However, the specific amounts recovered from them and the exact nature of their illegal gratification have not yet been disclosed by the investigating agency. Officials stated that the detailed role and modus operandi of the two arrested officials are still being uncovered through rigorous interrogation and examination of seized documents and digital evidence.

The Vigilance Bureau argued before the court that the case involved large-scale siphoning of government funds worth crores and that the investigation remained incomplete. The agency requested extended police remand to thoroughly interrogate the accused and uncover the full extent of the conspiracy involving bank officials, private persons, and public servants. Investigators emphasized that sustained and thorough custodial interrogation is crucial to ascertain the complete sequence of events, establish the nexus between various accused parties, and recover forged documents allegedly used in committing the fraud.

Broader Investigation and Previous Arrests

The arrest of Singh and Sangwan comes days after another government official—a superintendent in the office of the director of development and panchayat—was taken into custody in the same case. These arrests highlight the expanding scope of the investigation, which has now ensnared 14 accused persons across various categories. The original case, registered on February 23, centered on unauthorized transactions and suspected forgery related to Haryana government funds deposited in IDFC First Bank and AU Small Finance Bank under the Mukhya Mantri Gramin Awas Yojana 2.0.

The initial arrests included Ribhav Rishi, a former bank manager at IDFC First Bank, Abhay Kumar, an ex-employee, and Chandigarh residents Swati Singla and Abhishek Singla, who allegedly operated firms used to receive and launder the fraudulently transferred funds. Authorities have issued Look Out Circulars against multiple accused to prevent them from fleeing the country. Recent investigations traced nearly Rs 100 crore to a firm owned by the Singla siblings, while over Rs 250 crore was received by Sawan Jewellers, operated by Rajan Katodiah, who allegedly converted cash for the accused for substantial commissions and misrepresented the transactions as gold sales.

Swift Recovery and Government Action

Following the discovery of the fraud, the Haryana government took swift action to mitigate further losses. Chief Minister Nayab Singh Saini informed the state Assembly that Rs 556 crore, including interest, was recovered and returned to government accounts within 24 hours of the fraud's discovery. The Chief Minister emphasized that the funds represent public money and assured the public of strict action against all involved parties. In response to the scam, the Haryana government de-empanelled both IDFC First Bank and AU Small Finance Bank from handling government business, effective February 18.

No government funds shall henceforth be parked, deposited, invested or transacted through these banks, and new norms now permit administrative secretaries to approve account openings for government schemes only in nationalised banks operating in the state.

The investigation has revealed clear indications of collusion between bank employees and external elements in executing the alleged fraud. The case invokes multiple legal provisions, including Section 13(2) of the Prevention of Corruption Act and several sections of the Bharatiya Nyaya Sanhita relating to criminal breach of trust, cheating, forgery, and conspiracy. The Special Investigation Team continues to examine the roles of all involved parties and trace the complete money trail, with a chartered accountant engaged to expedite the forensic accounting process.

The ongoing investigation demonstrates the complex nature of the fraud, involving coordination between banking officials and government functionaries to misappropriate public funds. The steady stream of arrests indicates that investigators are methodically uncovering the layers of conspiracy and the network of individuals who facilitated the fraudulent transfers. As the probe progresses, the focus remains on tracing all diverted funds, establishing accountability at every level, and ensuring that justice is served for this breach of public trust and government resources.

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