New Delhi: A plush apartment in Dubai, a Rs 1.5 crore luxury watch, and a brand-new BMW. This is the lavish lifestyle a former IDFC First Bank manager, reportedly earning just over Rs 1 lakh a month, is alleged to have built in just two years as part of a scheme that allegedly siphoned off Rs 590 crore in Haryana government funds parked in fixed deposits.
The scam surfaced in February when a Haryana government department sought to close its account and transfer the balance to another bank–only to discover massive discrepancies between the amount in the records and the actual balance.
The state’s Anti-Corruption Bureau initially registered a case. But given its scale, the investigation was transferred to the Central Bureau of Investigation (CBI). So far, 15 people, including government officials, have been arrested, and several government officials have also been suspended.
Days after the fraud surfaced, IDFC First Bank said it had repaid Rs 557 crore to the concerned government departments, even as the investigation was still going on.
Investigators said the operation involving 14 bank accounts across eight government departments was so brazen that even they were stunned by the accused’s confidence in siphoning off public money, believing they would never be caught.
“Initially, we suspected they planned to siphon off this large sum, invest it in stocks, earn profits, and then return the principal to the accounts while pocketing the gains. But that was not the case. Once the money was withdrawn, it was diverted into real estate and gold,” the source said.
“There were some transactions in which the accused put portions of the money back in chunks, possibly whenever they felt scrutiny was increasing, only to withdraw it again later. Their intention was never to return the funds. They believed that since they had bribed government officials and had them on board, their cover would never be blown,” the source added.
Investigators say the financial fraud involved an organised four-level scheme by both bank officers and government officials, with the funds siphoned off through fake fixed deposits, forged cheques, shell companies and layered laundering.
First, government officials handling these accounts were allegedly persuaded by the accused bank managers to park public funds in fixed deposits in these banks.
Second, bank insiders who managed debit notes siphoned off government funds from these accounts using fake debit notes and forged cheques. They also allegedly suppressed transaction alerts to conceal the transactions.
Third, a network of shell companies was created to layer and route the siphoned funds through multiple channels.
And, finally, jewellers and real estate players were allegedly identified to convert the diverted money into assets.
Investigators found that once funds were siphoned out of government fixed deposits, they were first routed through 30 entities, including shell companies, before being funnelled into more than 600 entities, creating an elaborate web of layering and laundering, multiple sources told ThePrint.
According to the sources, the conspiracy was allegedly scripted in advance through meetings with government officials and then executed with ease. In return, officials were allegedly rewarded with “suitcases of cash and expensive luxury gifts delivered via human couriers”, investigators found.
Investigators said among the government officials arrested are Rajesh Sangwan, Controller of Finance and Accounts, Haryana State Agricultural Marketing Board; Amit Dewan, former Director (Finance), Haryana Power Generation Corporation Limited; Vikas Kaushik, and a senior accounts official linked to the Panchkula Municipal Corporation.
Also arrested are two officials on contract—Sukhwinder Singh Abrol, former project director at CREST (Chandigarh Renewable Energy and Science and Technology Promotion Society (CREST), and Nalini Malik, Chief Finance Officer (CFO) of the Chandigarh Smart City project.
Separately, several senior IAS and IFS officers have been transferred and shunted in the ongoing investigation, including the former CEO of CREST.
‘Proposals with inflated interest rates’
The question that many are now asking is: how was this alleged fraud executed so quietly, allowing crores to disappear without triggering any alarms before the cover was finally blown?
The investigation has revealed that the two alleged masterminds — Ribhav Rishi, manager at IDFC in Chandigarh, and Abhay Singh, relationship manager at AU Small Finance Bank — planned the conspiracy by targeting government departments and persuading officials to park unused funds in fixed deposits with their banks by offering an unusually high interest rate of 10 percent annually. The duo allegedly met officials from these departments, struck deals with them, and brought them on board the scheme.
Once the arrangement was in place, fabricated offer letters promising 10 percent annual returns—significantly above market rates—were allegedly issued to lure departments into putting large sums in fixed deposits.
“These were fabricated offer letters, and the government officials who agreed to place the money were already part of the fraud,” a source said.
According to the source, a façade of legitimate fixed deposits was created, and an entire paper trail was made, even though initially, no actual FDs were ever booked. Some FDs were later booked for other departments.
The source added that to create this façade, genuine bank accounts were opened using valid documentation, but fake fixed deposit receipts were allegedly generated and issued to the departments.
Whenever the government sought details of the balances in these accounts, forged statements were allegedly shared, falsely showing that funds were available in the account when, in reality, they were not there, the investigation has revealed.
Speaking to ThePrint, Ribhav Rishi’s lawyer dismissed the allegations as baseless. Rishi and Abhay were arrested by Haryana’s Vigilance and Anti-Corruption Bureau in February.
“These are such baseless allegations. Not even a single penny was recovered from my client. Do they really believe that a salaried employee can pull off such a big fraud by himself?” he asked.
“The bank manager in question has the authority to only clear a transaction of Rs 25 lakh. For an amount more than that, approvals are needed from higher-ups. And Rs 590 crore is a huge amount. There are so many checks and balances in a bank at multiple levels,” he said.
Accounts without requisite approvals
Investigators said the accused bypassed multiple banking safeguards.
Calling it a well-planned conspiracy, investigators said the bank accounts and fixed deposits opened in Chandigarh should never have been allowed under existing rules. The accounts, they said, were opened without mandatory approvals and in collusion with government officials.
According to the investigation, the Haryana government opened two accounts in IDFC First Bank and AU Small Finance Bank on 26 September 2025 under the MMGAY-2.0 (Mukhya Mantri Gramin Awas Yojana) scheme.
Initially, a department transferred Rs 50 crore and Rs 25 crore to IDFC First Bank and AU Small Finance Bank, respectively, in line with their sanctioned fund limits under the Finance Department instructions.
However, a source said this was a violation of rules. Under government rules, any organisation intending to place deposits for more than three months, or deposits above Rs 10 crore for up to three months, must send a proposal to the Finance Department at least 10 working days in advance for consolidation and approval. Investigators said this process was allegedly bypassed.
Moreover, according to official instructions, no such accounts could be opened outside Haryana. “All these guidelines were systematically violated as part of this conspiracy to siphon off funds,” the source said.
‘Diversion, layering, concealment’
An officer privy to the investigation told ThePrint that once funds were deposited in these accounts, they were transferred to the accounts of multiple entities, including Capco Fintech Services, Swastik Desh Projects, RS Traders, and SRR Planning Gurus — which were all shell companies created in the name of relatives of the accused.
The officer said Capco Fintech Services was registered in the name of Bhupinder Singh and Sapna, the wife of Rishi’s driver. Similarly, RS Traders was registered in the driver’s name while Swastik was floated in the name of Swati Singla, the wife of accused Abhay Kumar and her brother.
The investigation revealed that the accused rotated this money between the accounts of eight Haryana government departments and two more departments of the Union Territory of Chandigarh, to create many layers and a confusing audit trail.
The eight departments included Haryana Power Generation Corporation Limited, Haryana School Shiksha Pariyojna Parishad, Haryana State Pollution Control Board, Haryana Labour Welfare Board, Haryana State Agricultural Marketing Board and Haryana Rural Development Fund Administration Board.
It also found that the accused had rigged the phone alert system to conceal the movement of money and these transactions.
The transaction alerts were linked to a mobile number registered in the name of one Prince, Director (Panchayats), who was allegedly working with the accused, the source said.
“All internal banking controls were compromised with the connivance of bank officials. Either fake mobile numbers were entered in the forms so that transaction alerts never reached government departments, or the individuals receiving these messages were themselves compromised and already in collusion with bank officials, and therefore aware of the transactions,” the source said.
“They had complete control over call confirmations and SMS alerts,” the source said.
Sources also said that the maker-checker mechanism–a system to prevent the unilateral transfer of funds–as well as confirmation processes, were deliberately disabled with their active involvement.
The maker-checker process is a workflow that requires the approval of at least two individuals to authorise a transaction.
So, when funds have to be moved from one account to another, the person authorised to operate that account signs a cheque and submits it to the bank.
If the cheque involves a large amount, the banker first confirms with other authorised signatories whether the transaction should be processed.
And if the amount exceeds the banker’s approval limits, the transaction is escalated to a senior bank official for authorisation. Sources said this system was completely bypassed.
“They withdrew huge amounts of cash, and no one within the bank raised an alarm as they were all compromised,” the source said.
Jewellers, realtors—who received the money
According to CBI sources, once the funds were siphoned off, they were routed to private entities, including shell companies, and then to jewellers, real estate brokers and other intermediaries to be converted into cash.
“The siphoned-off funds were routed to jewellers, real estate agents and other intermediaries, where the amounts were converted into cash,” the source said.
“This cash was then distributed to government officials and other conspirators,” the source added.
According to investigators, more than Rs 200 crore allegedly went to the owner of Chandigarh’s Sawan Jewellers, Rajan Singh, who has been arrested.
They said over Rs 50 crore went to Malik Jewellers, over Rs 50 crore to Mega Store, over Rs 70 crore to real estate agent Vikram Wadhwa, and over Rs 20 crore to KLG Jewellers, all from Chandigarh.
“After the money was taken out and sent to shell companies, the accused transferred it to over 600 entities. Funds from these entities were layered and routed through various money launderers, including jewellers and real estate agents. There was extensive layering of the funds,” the source said.
The source added that tracing the proceeds is extremely difficult, as numerous entities received the money in both large and small amounts.
“Once the money passed through the second layer, it was dispersed among multiple recipients. The proceeds were used to purchase movable and immovable assets. A significant portion was distributed in cash to government officials,” the source said. “All of this is being examined by the Enforcement Directorate.”
(Edited by Sugita Katyal)