Gurugram: Haryana Chief Minister Nayab Singh Saini informed the Vidhan Sabha Tuesday that the state government recovered the full amount defrauded in the high-profile banking case involving government accounts at IDFC First Bank and AU Small Finance Bank.
The CM informed the House that the full sum was credited back to government accounts. He said Rs 556 crore in principal, along with Rs 22 crore in interest, totalling Rs 578 crore, was recovered within just 24 hours.
Saini attributed the fraud to collusion by lower-level employees at Chandigarh banks. He informed the state assembly about an FIR registered in Panchkula against employees of the Chandigarh branch of IDFC First Bank and the Chandigarh Sector 32 AU Small Finance Bank, along with unidentified others.
The probe has now been handed over to the Anti-Corruption Bureau (ACB). Additionally, a newly constituted high-level committee, headed by the finance secretary, is also investigating the details of the fraud.
FIR & sections invoked
Shukar Pal, Deputy SP of the Vigilance and Anti-Corruption Bureau, Panchkula Range—who heads the investigation team—told ThePrint Tuesday that the bureau registered its FIR No. 4 at its Sector 17 police station in Panchkula under sections 316, 318, 336, 338 and 340 and 61 of the Bharatiya Nyaya Sanhita (BNS) as well as sections 13(1)(a) and 13(1)(b) of the Prevention of Corruption (PC) Act.
BNS Section 316 pertains to criminal breach of trust, Section 318 deals with cheating, Section 336 covers forgery, Section 338 relates to forgery of valuable security, Section 340 applies to using as genuine any document or electronic record known or believed to be forged, and Section 61 is invoked against criminal conspiracy.
Section 13(1)(a) states that a public servant has committed the offence of criminal misconduct if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or any property under his control as a public servant, or allows any other person to do so. Section 13(1)(b) says that a public servant has committed criminal misconduct if he intentionally enriches himself illicitly during the period in office.
DSP Shukar Pal told The Print that ACB teams are now collecting records from the Chandigarh branches of both banks.
How the fraud surfaced
Irregularities, initially stated to be of Rs 590 crore, came to light when IDFC First Bank itself disclosed to the stock exchanges that certain unauthorised transactions had occurred in its Haryana government-linked accounts at its Chandigarh branch.
The bank admitted that some of its employees committed fraud in collusion with outsiders. It also immediately suspended four officials and ordered a forensic audit by an independent external agency.
IDFC First Bank’s special committee that monitors fraud convened a meeting on 20 February. This was followed by meetings of the bank’s audit committee and full board of directors on 21 February, the day that the directors were formally notified of the matter.
The Haryana government acted swiftly after departments noticed mismatches in account statements. With immediate effect, it de-empanelled both IDFC First Bank and AU Small Finance Bank for state business, directing that all funds, along with interest, to the nationalised banks.
The accounts have since been closed, and the money transferred.
On Monday, Chief Minister Saini reiterated in the House and later to reporters that not a single paisa of the government’s money will be lost and that strict action will be taken against all found involved—be it bank employees or outsiders.
The Opposition, however, cornered the government in the House. Congress MLAs also held a protest outside the state assembly.
The case sent ripples through the banking sector, causing sharp declines Monday in the shares of both IDFC First Bank and AU Small Finance Bank soon after the matter was disclosed.
The high-level committee set up by the state government is expected to submit its report soon, even as the ACB continues its criminal probe.
(Edited by Madhurita Goswami)
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