North Dinajpur police have unearthed a racket that officers said would steal state government funds meant for scholarships for students from various communities.

The police on Monday arrested Mahatabuddin, a resident of Karandighi block of the district, who is suspected to be the mastermind of the racket. They also made some seizures and are gathering more information about the alleged scam.

Officers said they came to know during a preliminary investigation that the accused and some of his associates used to obtain caste certificates of students in rural areas who had not applied for scholarships.

“They would then log into the website of the state government where students can apply for scholarships, which range between Rs 4,000 and Rs 20,000. They would provide all relevant details of the candidates and bank account numbers of the racket members where the scholarship money would be deposited,” an officer said.

The scholarships included those meant for students from the SC, ST, OBC and other communities.

Mahatabuddin might have amassed at least a couple of crores of rupees through the scam, said an officer.

According to sources, a few days back, some residents of Karandighi came to know about Mahatabuddin’s activities and alerted the police and the block development officer.

“We came to know that Mahatabuddin had collected the scholarship money in the name of a student who has left studies and is a migrant worker. Eventually, it was found that Mahatabuddin and his associates used several bank accounts where money meant for students was transferred,” said Rustam Ali, a resident of Karandighi and one of the complainants.

Mistri Murmu of Kaliaganj, in the same district, said Jaya, his daughter, was studying nursing at the North Bengal Medical College and Hospital.

“But in the official portal of the state government, it was seen that she was a student of Raiganj University. Her caste certificate was used to get the scholarship money. She had never applied for it,” Murmu said.

A district official said that as soon as they learnt about the case, they filed a police complaint on Sunday.

Mahatabuddin was arrested on Monday. He was produced in a court in Islampur, which remanded him in police custody. Mahatabuddin denied the charges and said he had been framed.

“The accused is being interrogated,” said Sana Akhtar, superintendent of police of the Raiganj police district.

The authorities of Raiganj University said they were aware of the case. “It is a serious matter,” said Durlabh Sarkar, registrar of the university.