Inside the Rs 590 Crore Bank Fraud: Officials, Bribes, and Systemic Failures in Haryana
An ongoing investigation by the Haryana State Vigilance and Anti-Corruption Bureau has uncovered a complex web of alleged bribery and forgery involving senior bankers and government officials in a Rs 590 crore fraud case. According to court filings, a former regional head of AU Small Finance Bank received nearly Rs 10 crore to facilitate illegal activities alongside accused staffers from IDFC First Bank. The revelations have led to the arrest of 15 individuals, including multiple bankers and four Haryana government officials, all currently in judicial custody.
Background and Context
The scandal centres on the alleged diversion of government funds from various state departments into fictitious accounts. The fraud came to light in February, prompting the Haryana Government to immediately de-empanel both IDFC First Bank and AU Small Finance Bank from handling government business. Following a departmental inquiry by the Panchayat Department, the Vigilance Bureau registered an FIR against employees of both banks and unidentified public servants on February 23. Preliminary investigations suggest a wide-ranging conspiracy where government funds were transferred without authorisation through the creation of multiple fake firms and shell companies.
Key Figures and Entities
The investigation has highlighted the alleged roles of several key actors. Arun Sharma, the former regional head of AU Small Finance Bank, is accused of accepting approximately Rs 10 crore in kickbacks. IPS officer and SIT member Medha Bhushan informed a Panchkula court that Sharma sent forged bank statements and received Rs 2 crore directly into his personal account. His counsel, Aman Dutt Sharma, has contested the police remand, arguing that the electronic device sought by investigators belonged to the bank and should have been recovered through other means.
Other accused include former IDFC First Bank staffers Ribhav Rishi and Abhay Kumar, who are alleged to be the masterminds. Anuj Kaushal is accused of processing unauthorised transactions for government bodies such as the Haryana School Shiksha Pariyojna Parishad and the Haryana State Pollution Control Board. Priyana Bhatoa, a cashier, allegedly forged Fixed Deposit records and processed unauthorised debits. Meanwhile, Ankur Sharma, a partner in SRR Planning Gurus Private Limited, is accused of receiving Rs 45 crore diverted from government accounts.
Legal and Financial Mechanisms
The alleged fraud relied on the manipulation of banking protocols and the use of shell entities. Investigators claim that Ribhav Rishi and Abhay Kumar conspired with Rajan Singh Katodia of Sawan Jewellers to divert funds. Katodia allegedly received over Rs 250 crore by issuing fake bills for gold sales, subsequently converting the proceeds into cash after deducting commissions. Additionally, Amit Dewan, a former director of finance at the Haryana Power Generation Corporation Limited, is accused of violating government procedures to open accounts in both banks and accepting illegal gratification to facilitate the offences.
International Implications and Policy Response
While the case is currently centered on Haryana, it underscores significant vulnerabilities in the oversight of public funds and the banking sector’s compliance mechanisms. The swift de-empanelment of the two banks signals a zero-tolerance approach by the state government, but the allegations raise broader questions about internal governance within financial institutions. AU Small Finance Bank has stated that its preliminary review found no financial impact, but has placed certain employees off-duty to cooperate with the investigation. The case highlights the ongoing risks of insider collusion and the need for rigorous audit trails in government banking operations.
Sources
This report draws on court submissions by the Haryana State Vigilance and Anti-Corruption Bureau, statements provided to The Indian Express, and official responses from AU Small Finance Bank.
