CBI Probe Expands As KPMG Calls IDFC First Bank Fraud An Isolated Branch-Level Incident
The alleged fraud involving funds parked at an IDFC FIRST Bank branch in Chandigarh has entered a new phase, with a forensic review by KPMG describing the incident as an isolated case linked to collusion among bank employees, government officials, and third parties, while the Central Bureau of Investigation (CBI) has widened its probe into the role of public servants and beneficiaries of the transactions.
KPMG, which submitted its forensic review to the bank’s Board, found that the fraud was confined to the bank’s Sector 32 branch in Chandigarh and that similar incidents were not observed across other branches. The review examined the nature of the incident, its financial impact, and the individuals involved. Based on claims received, the bank repaid Rs 645.59 crore in principal along with applicable interest to 11 government accounts and two school accounts, and recognised the amount in its fourth-quarter financial statements.
Following the findings, the bank said it has introduced additional controls, including centralised oversight mechanisms, enhanced customer communication processes, and technology-based monitoring systems to address collusion risks at the branch level.
Meanwhile, the CBI has intensified its investigation into the alleged diversion of government funds, estimated at around Rs 661 crore. The agency recently conducted searches at the residences of three Haryana-cadre IAS officers and an IFS officer after gathering evidence suggesting that public servants may have facilitated the opening of accounts, transfer of funds, and their subsequent diversion.
The agency’s first chargesheet, filed before a special CBI court, details the alleged role of government officials and bank personnel in the scheme. Investigators have identified a Noida-based company, Vipam Consultancy Pvt. Ltd., as a recipient of funds alleged to be proceeds of crime. According to the probe, funds from multiple Haryana government departments and Chandigarh entities were routed through several accounts and shell companies, creating layers of transactions that complicated the audit trail.
The CBI has also named former Branch Manager Ribhav Rishi and banker Abhay Kumar among the key accused. The investigation is continuing, and a supplementary chargesheet is expected to be filed.
