Chandigarh: In a major development in the ₹590-crore IDFC First Bank and AU Small Finance Bank scam, the Central Bureau of Investigation (CBI) has sought permission from the Haryana Government to investigate the alleged role of four IAS officers.
The agency has requested approval under Section 17A of the Prevention of Corruption (PC) Act, which requires prior sanction from the competent government before initiating an inquiry or investigation against a public servant for actions taken in the discharge of official duties.
Sources indicated that the Haryana Government is likely to grant the required approval. The CBI may subsequently seek similar permission to investigate two more IAS officers in the case.
What Is Section 17A of the Prevention of Corruption Act?
Section 17A of the Prevention of Corruption Act mandates that investigative agencies such as the CBI obtain prior approval from the appropriate government before launching an inquiry or investigation against serving public servants under the Act.
The provision is intended to protect honest officials from vexatious investigations while allowing probes in cases where there is credible evidence of wrongdoing.
Allegations Linked to Opening of Unauthorized Bank Accounts
According to sources, the alleged involvement of the IAS officers is connected to the opening of bank accounts in violation of the Haryana Finance Department’s guidelines.
Investigators suspect that funds belonging to multiple government departments were diverted through unauthorized accounts operated in collusion with bank officials, private individuals and government officers.
How the Rs 590-Crore Scam Came to Light
The scam involves alleged siphoning of approximately ₹590 crore from government funds through accounts maintained with:
- IDFC FIRST Bank
- AU Small Finance Bank
- Kotak Mahindra Bank
The funds are believed to have been misappropriated over a period of time by a network of bank officials and private entities allegedly acting in concert with government functionaries.
Administrative Action Already Taken
Following the emergence of the scam:
- Two IAS officers were suspended
- Four IAS officers were transferred
- Multiple departmental reviews were initiated
These actions were taken in connection with the IDFC First Bank, AU Small Finance Bank and Kotak Mahindra Bank-related irregularities.
CBI Took Over Probe in April
The CBI formally registered an FIR on April 8, 2026, after taking over the investigation from the Haryana State Vigilance and Anti-Corruption Bureau.
The state agency had originally registered the case on February 23, 2026.
The investigation is now focused on determining the extent of involvement of serving bureaucrats, bank officials and private individuals.
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