Banking & NBFCs · Daily brief

ED arrests two IDFC First Bank managers in ₹645 Cr embezzlement probe

The Enforcement Directorate has arrested former employees of IDFC First Bank's Chandigarh branch in connection with alleged large-scale fund siphoning through shell entities. A Special PMLA Court has remanded both to ED custody.

₹645 CrAlleged embezzlement detected

FINSAMUDRA DESK · 13 May 2026, 4:30 pm IST · 1 MIN

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90+Bank accounts frozen

19Premises searched

◆︎The Enforcement Directorate has arrested two former employees of IDFC First Bank’s Sector 32 branch in Chandigarh in connection with an ongoing money-laundering investigation. — Image: Finsamudra LinkedIn archive

Ribhav Rishi, a former manager, and Abhay Kumar, a former relationship manager at IDFC First Bank's Sector 32 branch in Chandigarh were arrested under the Prevention of Money Laundering Act. A Special PMLA Court has sent both to ED custody till May 21, 2026.

ED's investigation has detected alleged embezzlement of ₹645 crore from accounts maintained with the bank by the Haryana Government, Chandigarh UT Administration, and two private schools in Chandigarh and Panchkula. The agency has alleged that shell entities were used to route, layer and siphon off these funds.

The investigation has been broadened significantly. ED conducted searches at 19 premises across Chandigarh, Mohali, Panchkula, Gurugram and Bengaluru. More than 90 bank accounts have been frozen as part of the money-laundering probe.

The arrests point to systemic gaps in branch-level oversight and transaction monitoring. Shell entity routing and layering of public-sector funds suggests inadequate verification mechanisms at the point of account maintenance and fund movement.

Why it matters for connectors & lenders

For DSAs, loan agents, and fintech connectors in India's credit distribution network, this case underscores the operational risk of weak KYC and transaction monitoring. Banks and NBFC partners now face heightened scrutiny on account opening, particularly for government and institutional clients. Connectors must ensure their partner institutions have robust compliance frameworks to avoid contagion from such investigations.

The arrest sequence signals that regulators view branch-level staff as accountable for embezzlement schemes. DSAs and loan distributors working with banking partners should prioritize audit trails and segregation of duties in fund movement. Lenders will likely tighten controls on high-value transactions, potentially slowing disbursements and increasing documentation requirements across the lending value chain.

ED arrests two IDFC First Bank managers in ₹645 Cr embezzlement probe

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