Senior Haryana IAS Officer Arrested in Multi-Crore IDFC FIRST Bank Fraud Probe

In a significant development in the ongoing investigation into the multi-crore IDFC FIRST Bank fraud, the Central Bureau of Investigation (CBI) on Monday arrested senior Indian Administrative Service (IAS) officer Pankaj Aggarwal. Aggarwal, a 2000-batch IAS officer, was serving as Principal Secretary in the School Education and Agriculture departments at the time of the alleged irregularities and had also overseen crucial Assembly and Rajya Sabha polls in Haryana. He was produced before a Panchkula court on Tuesday.

The arrest stems from an alleged embezzlement of government funds from accounts belonging to the Haryana School Shiksha Pariyojna Parishad (HSSPP) and the Haryana State Agriculture Marketing Board (HSAMB), which were maintained at IDFC FIRST Bank's Sector 32 branch in Chandigarh. Investigators allege that these accounts were opened in violation of existing guidelines issued by the Haryana Finance Department, and funds exceeding prescribed limits were subsequently transferred into them.

The CBI's probe indicates that fraudulent transactions carried out through these accounts led to the alleged diversion of public funds, resulting in an estimated loss of Rs 60.54 crore to the state exchequer. The agency claims to have gathered incriminating evidence linking Aggarwal to the case. This particular fraud involving the education and agriculture departments forms a part of a much larger, systemic scam operating out of the same IDFC FIRST Bank branch.

This wider investigation, which the CBI took over from Haryana's State Vigilance and Anti-Corruption Bureau following a request from the state government in May, involves the alleged siphoning off of approximately Rs 504 crore belonging to eight Haryana government departments. The Enforcement Directorate (ED), also probing the scam, has pegged the total quantum of fraud at Rs 645.59 crore, encompassing funds from Haryana government departments, the Chandigarh Municipal Corporation, Chandigarh Renewable Energy and Science and Tech Promotion Society (CREST), and even two private schools in Panchkula. Other reports indicate a total embezzlement of around Rs 657 crore, combining losses to the Haryana government (Rs 504 crore) and the Chandigarh administration (approximately Rs 153 crore).

Aggarwal is the second IAS officer to be arrested in connection with this sprawling financial crime. Previously, senior IAS officer R.K. Singh was arrested for alleged misappropriation of funds involving the Municipal Corporation of Panchkula and has since been sent to judicial custody. The CBI has already filed chargesheets against 17 individuals in the Haryana-linked case. These include six bank officials from IDFC FIRST Bank and AU Small Finance Bank, three Haryana government public servants, two companies, and six private individuals.

The modus operandi of the fraud, as revealed by the ED, involved former IDFC FIRST Bank branch manager Ribhav Rishi, who is considered the mastermind. Rishi allegedly siphoned off Rs 570.82 crore through three shell firms, utilizing his driver, the driver's wife, his personal assistant, his mother, and a chartered accountant as proprietors or partners. Another former relationship manager, Abhay Kumar, allegedly siphoned off Rs 203.50 crore through a shell entity named M/s Swastik Desh Projects, opened in the names of his wife and brother-in-law. These shell entities received hundreds of crores, directly embezzled from various government accounts, which were then 'layered and siphoned off' through complex transactions. Funds meant to be maintained in Fixed Deposit Receipts (FDRs) were never created; instead, forged FDRs were misrepresented to departments, while actual funds were diverted.

Beyond these arrests, eight IAS officers are reportedly under the scanner in this scam, with two already apprehended. Other officers under investigation include Mohd Shayin, Mani Ram Sharma, Pardeep Kumar, Vineet Garg, Saket Kumar, and D.K. Behera. The CBI's investigation is ongoing, with searches conducted at various locations, including the residential premises of senior public servants and Vipam Consultancy Pvt. Ltd. and its director. Incriminating documents, digital devices, and property documents have been seized, as the agency continues to trace the flow of misappropriated funds and identify all involved parties.

The IDFC FIRST Bank acknowledged the fraud in February, initially estimating the amount at Rs 590 crore, and stated that it had settled claims totaling Rs 645 crore. The bank had suspended four branch officials, lodged a police complaint, and engaged KPMG for an independent forensic investigation. The Haryana government had also removed IDFC FIRST Bank and AU Small Finance Bank from its empanelled list and instructed state departments to close accounts with them.