India, Sept. 17 -- At least 2,500 bank accounts across the country have been frozen after a software security breach at an e-wallet firm allowed users to transfer money without balance, leading to the syphoning of at least Rs.40.22 crore, Gurugram police said on Tuesday.

Officials said a process is underway to form a special investigation team (SIT) to probe the large-scale fraud in which the firm suffered a hefty financial loss. The breach allowed users to transact "any desired amount even if it was unavailable in the wallet," according to police.

Police in Gurugram, Nuh and Palwal have issued advisories warning people not to exploit the loophole, cautioning that doing so would invite legal action. Six men were arrested from Palwal and...