Investigators Raid 19 Sites in Probe Into ₹590 Crore IDFC First Bank Fraud

India’s Enforcement Directorate (ED) has raided 19 locations across Haryana and Chandigarh as part of a widening investigation into the alleged embezzlement of ₹590 crore from government accounts held at IDFC First Bank. The searches target business entities suspected of providing "accommodation entries"—a method used to launder money and disguise the true source of illicit funds—according to official sources familiar with the matter.

Background and Context

The investigation centres on allegations that funds intended for deposit by various Haryana government departments were siphoned off before they could reach fixed deposit accounts. Instead of securing state funds, accused individuals allegedly diverted the money for personal use, exploiting gaps in internal banking controls. The use of accommodation entries, a mechanism often involving fictitious transactions, allowed the perpetrators to layer financial movements and obscure the audit trail, complicating the efforts of forensic accountants to track the flow of capital.

Key Figures and Entities

The operation has brought scrutiny to a network of ex-bank officials, beneficiaries of the alleged scheme, and real estate agents implicated in dissipating the proceeds of crime. Notably, Vikram Wadhwa, a Chandigarh-based hotelier involved in construction projects across the Tricity area, has emerged as a key figure in the investigation. According to sources, Wadhwa has absconded following public revelations about the scam. The raids also targeted shell companies and minor jewellery entities that investigators claim facilitated the movement of illicit cash.

Legal and Financial Mechanisms

Financial inquiries reveal a sophisticated layering process where substantial sums were transferred through a web of shell companies. The funds were subsequently routed into the jewellery sector and eventually converted into gold purchases or reinvested into real estate projects. Investigators have noted significant cash withdrawals throughout the money trail, indicating a deliberate attempt to break the chain of custody. By converting digital fraud into tangible assets like property and bullion, the accused sought to insulate the proceeds from freezing orders and asset recovery efforts.

International Implications and Policy Response

While the case is currently centered on regional banking practices in Haryana, it highlights broader vulnerabilities in how public sector funds are monitored and audited within the banking system. The alleged ability of former bank officials and private actors to divert significant government resources points to potential lapses in regulatory oversight. The case may prompt calls for stricter auditing protocols for government accounts and enhanced due diligence regarding the end-use of funds deposited by state entities.

Sources

This report is based on information provided by sources within the Enforcement Directorate and previous media coverage, including Reuters. Details regarding the specific charges and financial mechanisms are drawn from public statements made during the investigation on March 11, 2026.