IDFC First Bank Reports ₹590 Crore Fraud Linked to Haryana Government Accounts at Chandigarh Branch

Mumbai, February 22: IDFC First Bank on Sunday disclosed a fraud of ₹590 crore involving accounts held by the Haryana government at one of its branches in Chandigarh, triggering regulatory reporting, a police complaint, and an internal probe.

Fraud Detected During Account Closure and Balance Transfer Request​

In a regulatory filing made in the early hours, the private sector lender said it had informed the banking regulator and lodged a police complaint following the detection of discrepancies.

According to the filing, prima facie unauthorized and fraudulent activities were carried out by certain employees at a specific branch in Chandigarh. The issue involves a defined set of accounts linked to the Haryana state government and may potentially involve other individuals, entities, or counterparties.

The bank stated that the matter came to light when a Haryana government department, which had been banking with IDFC First Bank, requested closure of its account and transfer of the balance to another bank. During this process, discrepancies were observed between the amount mentioned and the actual balance in the account.

Subsequently, similar discrepancies were identified in other Haryana government-linked accounts that engaged with the bank from February 18 onwards.

Fraud Size Estimated at ₹590 Crore; Final Amount Under Reconciliation​

IDFC First Bank has currently estimated the fraud size at approximately ₹590 crore. However, it clarified that a reconciliation exercise is underway to determine the final amount. The final figure will depend on receipt of additional information, validation of claims, and potential recoveries.

The bank emphasized that the matter is confined to a specific group of government-linked accounts within the Haryana Government operated through the Chandigarh branch. It stressed that the issue does not extend to other customers of the same branch.

The aggregate amount under reconciliation across the identified accounts at the branch stands at around ₹590 crore.

Four Officials Suspended; Forensic Audit Initiated​

As part of immediate action, four officials working at the concerned branch have been placed under suspension pending investigation. The bank has assured strict disciplinary, civil, and criminal action against the employees and any external individuals found responsible.

To secure potential recoveries, IDFC First Bank has sent recall requests to certain beneficiary banks, asking them to lien mark balances in suspicious accounts held with them.

The lender has informed its statutory auditors and will conduct an independent forensic audit through an external agency to examine the transactions and identify accountability.

Board-Level Oversight and Regulatory Reporting​

Following the discovery, the matter was placed before a Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds on February 20. The audit committee and the board were apprised a day later, reflecting board-level oversight of the issue.

Stock Performance and Recent Financials​

On Friday, shares of IDFC First Bank closed 0.72 per cent higher at ₹83.56 apiece, compared to a 0.38 per cent gain in the benchmark index.

For the quarter ended December 31, 2025, the bank reported a 24 per cent increase in deposits, including a 33 per cent rise in the share of low-cost current and savings account deposits. Net profit for the October to December period rose 48 per cent to ₹503 crore.

The bank said further updates will follow as the reconciliation and forensic review progress.