In a significant development in the ₹590-crore banking fraud involving IDFC First Bank, preliminary investigations have revealed that the main accused allegedly set up several fake companies to illegally divert government funds into multiple bank accounts. The findings emerged during a police press briefing on Thursday as authorities provided updates on the ongoing probe.
Investigators stated that the fraud involved at least 12 bank accounts connected to eight government departments. Among these, ten accounts were maintained at a branch of IDFC First Bank in Chandigarh, while two additional accounts were held with AU Small Finance Bank.
According to officials, the accused allegedly executed the fraud by generating fake debit memos and transferring funds without proper authorisation. Forged bank statements were also reportedly used to enable transfers to accounts linked to the accused individuals and their associates.
Investigators are currently examining financial records from the past year in order to trace the complete movement of funds and identify the full network involved in the scam.
So far, 11 individuals have been arrested in connection with the case. Those detained include six bank employees, one government official, and four other persons believed to be linked to the operation. Out of the 11 accused, ten are presently in judicial custody, while one individual remains on police remand for further questioning.
As part of the investigation, authorities have conducted raids at 16 different locations. During these searches, officials recovered documents relating to property purchases that are suspected to have been made using the proceeds of the alleged fraud.
The investigating team also seized more than 25 electronic devices, including mobile phones and laptops, which have been sent for forensic analysis. Additionally, six luxury vehicles believed to have been purchased with illegally diverted funds were recovered. These include three Toyota Fortuner SUVs, two Toyota Innova vehicles, and one Mercedes car. Investigators have also identified ten properties that are suspected to have been acquired using the misappropriated money.
An FIR in the case was registered on February 23, 2026, against unknown officials of both IDFC First Bank and AU Small Finance Bank. The case has been filed under provisions of the Prevention of Corruption Act, 1988, as amended in 2018, along with relevant sections of the Bharatiya Nyaya Sanhita, 2023. The investigation is continuing as authorities attempt to identify additional individuals involved and recover the diverted funds.
