Vishal Ahirwar, 36, was reportedly arrested on May 20 after the matter came to light earlier this month.
According to reports, the depositors were shocked when the post office employees told them that their Fixed Deposit numbers and account numbers were not existing in the records and there were no FDs in their names.
When the depositors repeatedly visited the sub-post office for the next few days to enquire about their investments, they were told that the sub-postmaster had allegedly put their money into an IPL betting racket app, PTI reported quoting Government Railway Police police station in-charge Ajay Dhurve said.
Based on the complaints of the depositors, the police arrested Ahirwar on May 20, the GRP official said.
During questioning, Ahirwar confessed that had invested the depositor's money into the IPL betting racket app that promised quick and rich dividends.
Following Ahirwar's questioning, names of 20 victims have so far come to light who have been allegedly duped of about Rs 1.25 crore, Dhurve said.
Among the victims was an elderly woman, Kishori Bai, who had reportedly deposited INR 5 lakh in the post office for arranging funds for the marriage of her four daughters.
Parmanand Sahu, another senior citizen, had deposited his retirement benefit amount in the post office.
A case has been registered against Ahirwar under Indian Penal Code Sections 420 (cheating) and 408 (criminal breach of trust by clerk or servant), the official said.
Since the incident has come to light, some more people have also approached police to inform them about their investments made in the sub-post office, he added.
Meanwhile, Gujarat Titans on Tuesday defeated Rajasthan Royals at Eden Gardens, Kolkata in Qualifier 1 of IPL 2022 to enter the final in their maiden season.
Lucknow Super Giants, the other debutants, face Royal Challengers Bangalore in the Eliminator at Eden Gardens on Wednesday. The winners will take on Rajasthan Royals in Qualifier 2 at Narendra Modi Stadium, Ahmedabad on May 27.
The IPL 2022 final is scheduled for May 29 in Ahmedabad.
(With PTI inputs)