Accused created fake firms to divert money from govt funds: Cops in IDFC First scam

In a major breakthrough in the Rs 590-crore IDFC First Bank scam, preliminary investigations have revealed that the key accused created multiple fake companies to illegally divert government funds into several accounts.

Police made the statement during a press briefing on Thursday. They said that so far, the investigation has revealed the involvement of as many as 12 bank accounts linked to eight government departments in the fraud. Of these, 10 accounts were maintained at a branch of the IDFC First Bank in Chandigarh, while two accounts were held at AU Small Finance Bank.

The probe has also revealed that the accused carried out the fraud by preparing fake debit memos or transferring funds without valid authorisation. Forged bank statements were also used to facilitate transfers to accounts linked to the accused and their associates.

Investigators are currently scrutinising the financial records of the past year to trace the full fund flow.

As many as 11 people have so far been arrested, including six bank employees, one government official and four other individuals. Of them, 10 are currently in judicial custody while one is on police remand.

The investigation team has conducted raids at 16 locations and recovered documents related to property purchases suspected to have been made using proceeds of crime. More than 25 electronic devices, including mobile phones and laptops, have been seized and sent to the forensics team for examination. Officials have also seized six luxury vehicles — three Toyota Fortuners, two Innovas and one Mercedes — believed to have been purchased using illicit funds. Investigators have identified 10 properties suspected to have been acquired through the diverted money.

An FIR in the case was registered on February 23, 2026, against unknown officials of IDFC First Bank and AU Small Finance Bank under provisions of the Prevention of Corruption Act, 1988 (as amended in 2018) and relevant sections of the Bharatiya Nyaya Sanhita, 2023.

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