The Haryana government has given a green signal to the CBI to investigate the alleged role of five IAS officers in the Rs 590-crore IDFC First Bank fraud case.

The permission has been granted under section 17A of the Prevention of Corruption Act (PCA), according to which no police officer shall conduct any inquiry or investigation into any offence alleged to have been committed by a public servant, without the previous approval of the competent authority.

With the government's go-ahead, the Central Bureau of Investigation (CBI) can now call the officers for questioning, sources said.

They said the CBI had moved a request to proceed against the Indian Administrative Service (IAS) officers based on the disclosure statements of the accused and the investigators might look into various administrative approvals that allowed the depositing of government funds in private banks.

The CBI conducted searches at multiple locations in Chandigarh and Panchkula on Thursday in connection with the bank-scam case and seized financial records and digital evidence linked to the alleged fraud.

Certain officials of the IDFC First Bank and the AU Small Finance Bank, in connivance with public servants from various Haryana government departments, had allegedly misappropriated government funds through fraudulent means, an official statement said on Friday.

Sixteen accused have so far been arrested in the case.

In a statement, a Haryana government spokesperson had recently said "an inquiry committee constituted in February 2026 by the Director, Development and Panchayats Department, had uncovered irregularities and discrepancies in accounts operated in IDFC First Bank and AU Small Finance Bank. Based on the committee's report and supporting documents, the case was referred to the State Vigilance and Anti-Corruption Bureau (SV&ACB) for criminal investigation".

Subsequently, on February 23, an FIR was lodged at the SV&ACB police station in Panchkula under various sections of the PCA and the Bharatiya Nyaya Sanhita (BNS).

The matter was subsequently handed over to the CBI.

The case pertains to the alleged diversion and misuse of around ₹590 crore of government funds that were reportedly parked in private banks instead of authorised treasury channels. According to investigators, officials of various Haryana government departments allegedly colluded with employees of IDFC First Bank and AU Small Finance Bank to open and operate unauthorised accounts, through which government money was routed and misappropriated. The alleged fraud came to light after discrepancies were detected in accounts linked to the Development and Panchayats Department during an internal inquiry.