On a scorching Monday afternoon in Chandigarh, the quiet, white-collared corridors of the Haryana Civil Secretariat were suddenly disrupted by the arrival of a federal warrant. On June 22, 2026, the Central Bureau of Investigation (CBI) arrested Pankaj Aggarwal, a senior Indian Administrative Service (IAS) officer of the 2000 batch. Aggarwal, then serving as the Principal Secretary of the Architecture Department, had previously overseen the powerful portfolios of School Education and Agriculture.

His arrest was not a sudden anomaly; it was the latest, most dramatic arrest in a sprawling, multi-city investigation into a Rs 657-crore financial scandal that has systematically hollowed out public treasuries, exposing a deeply entrenched network of corrupt mandarins and banking insiders.

The conspiracy operated within a high-value private banking hub at the Sector 32 branch of IDFC First Bank in Chandigarh. Over several months, funds earmarked for rural housing, green energy initiatives, and municipal infrastructure were redirected. These public assets were routed through shell corporations, converted into gold bullion, and invested in luxury real estate developments. Federal investigators have uncovered a coordinated effort involving multiple state departments, elite administrative offices, and branch-level banking operations.

The Silent Siphon

The genesis of the investigation began in the freezing weeks of January 2026. Following routine administrative instructions to wind down its accounts under the Mukhya Mantri Grameen Awas Yojna 2.0 (MMGAY-2.0) housing scheme, the state's Development and Panchayats Department requested the closure of its account at IDFC First Bank and the transfer of its balance to Axis Bank. The department expected a full transfer of its parked capital, but instead, IDFC First Bank remitted a mere Rs 1.27 crore and closed the account.

This massive mismatch unraveled the entire operation. A three-member inquiry committee was formed on February 11, 2026, to conduct an urgent audit. What they discovered was a systematic plundering of state funds. Two bank accounts had been opened on September 26, 2025, at the Sector 32 branches of IDFC First Bank and AU Small Finance Bank with initial deposits of Rs 50 crore and Rs 25 crore respectively. Although state finance guidelines mandated that these funds remain completely untouched, they had been drained through unauthorized transfers almost immediately after being parked.

To prevent administrative heads from detecting the siphoned funds during routine reconciliations, the conspirators had hijacked the bank’s communication infrastructure. Transaction alerts and SMS notifications for the accounts were registered to a mobile number held by Prince Sharma, a department superintendent who was not even part of the housing scheme's operational team. Sharma suppressed the notifications, allowing the unauthorized withdrawals to continue unnoticed for months.

The Anatomy of the Heist

To bypass digital treasury controls, the conspirators relied on physical banking instruments. Despite state guidelines pushing for automated, electronic payment systems, the bank employees processed unauthorized transactions using physical cheques and manual debit notes. To authorize these withdrawals, the suspects forged the signatures of senior administrative officers, including former Director General Dusmanta Kumar Behera. Behera had relinquished charge on October 28, 2025. Yet, the bank continued to process and honor physical cheques bearing his forged signature well into November and December 2025, clearing nearly Rs 50 crore after his departure.

The most glaring compliance failure occurred with Cheque No. 000011, drawn on the housing scheme account. The cheque recorded the transaction value in figures as Rs 2,50,00,000 (two crore fifty lakh) but recorded the value in words as "Rupees twenty-five crore". Standard banking guidelines dictate that any mismatch between the amounts written in figures and words must result in the transaction being flagged and rejected. Instead, the bank processed the transaction based on the written words, allowing the siphoned amount to increase by Rs 22.50 crore in a single day.

Once siphoned, the funds were routed through a network of shell companies and corporate fronts to be integrated into the formal economy. The primary destination was Swastik Desh Project, a partnership firm in which Swati Singla held a 75 percent stake and her brother Abhishek Singla owned the remaining 25 percent. Swati was married to Abhay Kumar, the bank relationship manager who processed the siphoned transactions.

Over Rs 300 crore was routed into Swastik Desh Project's accounts. From there, more than Rs 250 crore was moved to Sawan Jewellers, owned by Rajan Katodia. Katodia recorded fictitious sales of gold items to the shell firms in his business ledgers to convert siphoned funds into physical gold, which was subsequently distributed to the involved public officials. Concurrently, real estate developer Vikram Wadhwa served as another laundering conduit, receiving over Rs 70 crore in his personal account to fund luxury projects.

The Fall of the Mandarins

The investigation gained momentum on February 18, 2026, when the Haryana Government issued an official circular de-empaneling IDFC First Bank and AU Small Finance Bank from handling any government accounts, ordering all departments to transfer their balances to public sector banks. On February 22, IDFC First Bank formally disclosed a suspected fraud of Rs 590 crore at its Chandigarh branch to regulators and the RBI. The Haryana Anti-Corruption Bureau (ACB) formally registered FIR No. 03 on February 23, and a Special Investigation Team (SIT) was formed under IPS officer Ganga Ram Punia.

The first wave of arrests followed on February 24, with the detention of former branch manager Ribhav Rishi, relationship manager Abhay Kumar, Swati Singla, and Abhishek Singla. By mid-March, the state had arrested finance controllers Rajesh Sangwan and CAO Randhir Singh for accepting bribes and colluding with Katodia. In April, the state government formally handed the entire investigation over to the CBI.

The administrative fallout intensified on April 9, 2026, when Chief Secretary Anurag Rastogi suspended IAS officers Ram Kumar Singh (2012 batch) and Pardeep Kumar (2011 batch). In May, the state government granted the CBI formal sanction to investigate five IAS officers under Section 17A of the Prevention of Corruption Act.

On June 17, 2026, the CBI arrested senior Indian Forest Service (IFoS) officer Navneet Srivastava, former CEO of CREST, for siphoning Rs 75 crore from green energy accounts. Investigators established that a portion of the siphoned funds was routed directly into a private company where Srivastava's wife and a close relative served as directors.

On June 18, 2026, the CBI arrested Ram Kumar Singh at his residence in Karnal. Singh, the former Municipal Commissioner of Panchkula, was accused of siphoning Rs 79.46 crore from municipal accounts by signing blank cheques and handing them to bank intermediaries under the pretext of creating fixed deposits that never existed.

When Singh was produced in court on June 22, 2026, the CBI revealed that he had systematically deleted his digital communication records and chat logs with the mastermind before his arrest. Both Singh and Prince Sharma were remanded to 14 days of judicial custody.

The Custody of Pankaj Aggarwal

The arrest of Pankaj Aggarwal on June 22, 2026, completed the cycle. As the Principal Secretary of School Education and Agriculture, Aggarwal had overseen the departments whose accounts at the Sector 32 branch of IDFC First Bank were opened in direct violation of state Finance Department guidelines. The CBI presented evidence that these unauthorized accounts were established during Aggarwal’s tenure and were used for the illicit transaction of public funds, resulting in a net loss of Rs 60.54 crore to the state exchequer.

On the morning of Tuesday, June 23, 2026, Aggarwal was produced before the Special CBI Court in Panchkula. The prosecution team argued that Aggarwal's custodial interrogation was essential to map the administrative approvals that allowed state funds to be deposited in private banks. Aggarwal’s legal team maintained that he acted in good faith, arguing that the accounts were opened based on files prepared and presented by departmental accounts controllers. The court remanded Aggarwal to two-day CBI custody.

Institutional Echoes and the Policy Shift

The scale of the conspiracy has exposed severe structural vulnerabilities in India’s public sector financial systems. The fallout extended to Kotak Mahindra Bank's Panchkula branch, where a parallel Rs 145-crore fixed deposit fraud involving municipal funds was unraveled in March 2026. Kotak's Deputy VP Pushpender Singh and Relationship Manager Dileep Kumar Raghav, in collusion with ex-Senior Accounts Officer Vikas Kaushik, had siphoned municipal funds into the accounts of private financiers and routed them back to Singh's wife.

The rapid discovery of these parallel frauds prompted the Haryana Government to permanently de-empanel IDFC First Bank, AU Small Finance Bank, and Kotak Mahindra Bank. The state shifted its financial policy entirely, restricting the parking of all state revenues, department deposits, and PSU assets exclusively to public sector banks.

As the joint CBI and ED investigations continue, federal agencies remain focused on tracing the final destinations of the siphoned capital to recover the state's lost funds. With 17 accused already chargesheeted, the trial promises to be a landmark prosecution of corporate-bureaucratic collusion.