Finsamudra Desk
Investigators are pursuing beneficiaries and officials linked to alleged siphoning of government treasury funds from a single private bank branch in Chandigarh and Ludhiana.
The Central Bureau of Investigation has carried out raids across five locations in Chandigarh and Ludhiana, targeting beneficiaries and officials tied to a ₹657 crore scam at IDFC FIRST Bank.
Of the total, ₹504 crore was allegedly siphoned from Haryana Government accounts, and ₹153 crore from Chandigarh Smart City and Municipal accounts.
The alleged modus operandi involved fake Fixed Deposit Receipts, forged signatures, unauthorized debits, and a network of shell entities used to launder the proceeds.
The scale of the alleged fraud points to a single branch manager bypassing maker-checker protocols to issue fake FDRs and route funds to shell accounts.
Private banks compete aggressively for government deposit mandates, but this case shows the operational risk that comes with holding public treasury funds. For lenders, it underscores that maker-checker protocols and manual sign-offs are not sufficient safeguards against collusion at the branch level.
For DSAs and connectors who route institutional or government-linked deposits and accounts to banking partners, this is a reminder to scrutinize a bank's real-time audit verification systems, not just its digital transformation claims, before recommending it for large treasury mandates.
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