IDFC First Bank has disclosed a major fraud amounting to ₹590 crore involving accounts linked to the Haryana Government, sending shockwaves through the banking sector. The irregularities were detected at a specific branch in Chandigarh, prompting immediate action from the bank’s management and regulatory disclosures.
The issue surfaced when a Haryana Government department requested the closure of its account and a transfer of the remaining balance to another bank. During this routine process, discrepancies were noticed between the balance mentioned in the request and the actual funds reflected in the account. What initially appeared to be a minor mismatch soon revealed a larger pattern of inconsistencies across a group of government-linked accounts operated through the same branch.
In its regulatory filing, IDFC First Bank stated that prima facie unauthorized and fraudulent activities had been carried out by certain employees at the Chandigarh branch. The bank clarified that the matter appears confined to a specific set of Haryana Government-linked accounts and does not extend to other customers of the branch.
The lender has currently estimated the fraud size at approximately ₹590 crore. However, it has also noted that the final amount may change after a detailed reconciliation exercise. The ultimate figure will depend on validation of claims, additional information received, and possible recoveries. The bank described the ₹590 crore as the aggregate amount under reconciliation across the identified accounts.
Swift action followed the discovery. Four officials working at the bank have been suspended pending investigation. The bank has assured that strict disciplinary, civil, and criminal action will be taken against employees and any external individuals found responsible.
To prevent further fund movement, IDFC First Bank has sent recall requests to certain beneficiary banks and asked them to lien-mark balances in suspicious accounts. A police complaint has been filed, and the banking regulator has been informed. The bank has also notified its statutory auditors and decided to conduct an independent forensic audit through an external agency.
The matter was placed before the 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 shortly thereafter, signaling that the top leadership is closely monitoring developments.
Despite the fraud disclosure, the bank’s recent financial performance remains strong. For the quarter ending December 31, 2025, IDFC First Bank reported a 24 percent rise in deposits, including a 33 percent increase in low-cost current and savings account deposits. Net profit surged 48 percent to ₹503 crore during the October–December period. The bank’s shares had closed at ₹83.56 on the BSE on Friday, gaining 0.72 percent compared to the benchmark’s 0.38 percent rise.
The incident highlights the critical importance of internal controls, regular reconciliation processes, and robust oversight mechanisms, especially in accounts linked to government entities. As investigations and forensic audits progress, stakeholders will closely watch how much of the amount can be recovered and whether deeper systemic lapses come to light.
For now, the focus remains on accountability, recovery of funds, and restoring trust. The final outcome will depend on the findings of the ongoing probe and the effectiveness of the bank’s corrective measures.
Summary – Key Highlights:
IDFC First Bank has reported a ₹590 crore suspected fraud linked to Haryana Government accounts at its Chandigarh branch. Four officials have been suspended. The bank has informed regulators, filed a police complaint, and initiated a forensic audit. The fraud is said to be confined to specific government-linked accounts and does not impact other customers.
Frequently Asked Questions (FAQ)
1. What is the ₹590 crore fraud case involving IDFC First Bank?
IDFC First Bank has reported a suspected fraud of approximately ₹590 crore involving accounts linked to the Haryana Government. The irregularities were detected at its Chandigarh branch during an account closure and balance transfer request.
2. Which branch of the bank is under investigation?
The issue has been traced to a specific branch of IDFC First Bank in Chandigarh. The bank has clarified that the matter is limited to a defined set of government-linked accounts operated through this branch.
3. Are other customers of the Chandigarh branch affected?
According to the bank’s official statement, the fraud is confined to certain Haryana Government-linked accounts and does not extend to other customers of the branch.
4. How was the fraud detected?
The discrepancies came to light when a Haryana Government department requested closure of its account and transfer of funds to another bank. During reconciliation, mismatches in balances were observed, prompting further internal review.
5. What action has IDFC First Bank taken so far?
The bank has suspended four officials pending investigation, informed the banking regulator, filed a police complaint, and initiated an independent forensic audit through an external agency.
6. Is the ₹590 crore the final confirmed loss?
No. The bank has stated that ₹590 crore is the estimated amount currently under reconciliation. The final figure may change after validation of claims, further information, and possible recoveries.
7. Has the bank started recovery efforts?
Yes. IDFC First Bank has sent recall requests to certain beneficiary banks and asked them to lien-mark balances in suspicious accounts to prevent further movement of funds.
8. Has the board been informed about the fraud?
Yes. The matter was placed before the bank’s Special Committee for Monitoring and Follow-up of Fraud Cases. The audit committee and the board were also informed shortly after the discovery.
9. Could this impact IDFC First Bank’s financial stability?
The bank recently reported strong quarterly results, including a 48% rise in net profit. As of now, it has stated that the issue is limited in scope and does not affect its broader customer base.
10. What happens next in the investigation?
An independent forensic audit will examine transaction trails, internal processes, and possible external involvement. The outcome of this audit and police investigation will determine accountability and final financial impact.