An eye-opening incident of financial misconduct has emerged in the Insurance Regulatory and Development Authority of India (IRDAI) where an assistant manager, B. H. Suryanarayana Sastry, was arrested by the Economic Offences Wing (EDW) of the Cyberabad police on allegations of stealing more than ₹5.3 crore of funds of the organization.
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Crime Spans Nine Months, Detected During Internal Audit
As per a complaint filed by Deepak Khanna, the General Manager (Administration and HR) at IRDAI, the fraud was committed over a period of 9 months- between July 2024 and April 2025 and was discovered after an internal audit of the company by IRADI revealed high amounts of money were paid by the company through Sastry.
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The investigators followed eight transactions between 88,001 to above 24 lakh with a single State Bank of India account. Additional investigation showed there were four more beneficiary accounts, none of them bearing the name of an approved vendor of IRDAI, indicating the possibility of more layers of obfuscation.
Admission and Immediate Action
Sastry was arrested allegedly and admitted to have misappropriated the funds when questioned by authorities. Later, on August 21, 2025, IRDAI suspended him and started disciplinary action against him as per its staff regulations of 2016.
FIR and Legal Trajectory
After the internal complaint of IRDAI, the EOW filed an FIR on August 22, 2025, based on various provisions of the Bharatiya Nyaya Sanhita (BNS), such as those on cheating (318(4)) and criminal breach of trust by a public servant (316(5)), forgery (338, 336(3)) and use of forged documents (340(2)), falsification of accounts (344) and criminal conspiracy (61(2)).
Probe Underway, No Arrests Yet
The government has initiated an extensive probe to track down all the fraud money trail and reclaim the stolen money. At the moment, no arrests have been done.
Significance of the Case
This scam is a blemish in the operation of a major regulatory agency that regulates the Indian insurance sector, but this is a serious one. The case reveals that there are essential lapses in internal control measures and vendor checking procedures at IRDAI. The disciplinary action and the multi-pronged legal action are a swift response to reduce malfeasance and bring credibility back.
Stakeholders in the financial regulatory ecosystem will closely track results as the investigation proceeds, including how the funds will be located and restored, whether institutional procedures will be made stronger, and what it will mean to future accountability in law enforcement.
