The Central Bureau of Investigation (CBI) on Thursday, 18 June arrested Ram Kumar Singh, an IAS officer and former Commissioner of the Municipal Corporation (MC) Panchkula, in connection with the alleged misappropriation of ₹79.46 crore in government funds held at the IDFC First Bank branch in Chandigarh's Sector 32. The arrest marks a significant escalation in a wider banking fraud that has already seen 17 accused charge-sheeted by the federal agency.

How the Fraud Was Executed

According to the CBI, the account at IDFC First Bank was opened in violation of the Haryana Finance Department's existing guidelines. Investigators found that details recorded in the account-opening form were deliberately falsified to conceal fraudulent transactions planned for a later stage.

Singh allegedly handed over multiple pre-signed cheques to bank officials through middlemen, ostensibly for the purpose of creating fixed deposits. No fixed deposits were ever created. Instead, the funds were debited using those cheques and subsequently diverted to shell entities controlled by the accused bank officials, according to the CBI's statement.

Key Accused and Searches Conducted

The CBI said the misappropriation was carried out with the knowledge and active participation of Singh and the civic body's senior accountant, who was arrested in an earlier phase of the investigation. Searches were conducted at Singh's residences in Chandigarh and Karnal, from which several incriminating documents were reportedly recovered.

Part of a Larger ₹504 Crore Scam

The Panchkula MC fraud forms one component of a far larger financial crime. Investigators say funds totalling ₹504 crore belonging to eight Haryana government departments were siphoned off through the same IDFC First Bank branch via forged and non-existent fixed deposits, debit notes, and shell entities. So far, 17 accused have been charge-sheeted, including six officials of IDFC First Bank and AU Small Finance Bank, three Haryana government officials, two companies, and six private individuals.

CBI's Expanded Mandate in Chandigarh

The CBI took over this investigation from the Haryana Vigilance and Anti-Corruption Bureau at the state government's request. Beyond the Panchkula MC case, the agency has also assumed charge of two related matters — one involving Chandigarh Smart City Limited (CSCL) of the Chandigarh Municipal Corporation, and another pertaining to CREST Chandigarh. Charge sheets have been filed in both cases, naming five bankers, one CSCL official, and one private individual in the CSCL matter, and five bankers, two CREST officials, four private individuals, and two companies in the CREST case.

This is the latest in a series of arrests as the CBI systematically works through what investigators describe as a coordinated multi-department banking fraud. With Singh's arrest, attention will now turn to whether further serving or retired officials are implicated as the probe widens.