On 22 February 2026, IDFC First Bank disclosed that it has detected a suspected fraud of approximately ₹590 crore at its branch in Chandigarh, tied to a cluster of accounts linked to the Government of Haryana.
The bank’s regulatory filing to stock exchanges said that preliminary investigations revealed “unauthorised and fraudulent activities” by certain branch employees, possibly in collusion with external individuals or entities.
The incident came to light when a Haryana government department requested closure of its account and transfer of funds to another bank. During the processing, the bank found discrepancies between the balance stated by the department and the bank’s records.
Similar mismatches surfaced in other Haryana government-linked accounts at the same branch as departments engaged to reconcile their balances.
According to the bank, the matter currently appears limited to a specific set of government-linked accounts at this branch and does not involve all customers of the Chandigarh branch — though investigations are ongoing.
How the Bank Is Responding
In its official disclosure, IDFC First Bank laid out several steps it has taken so far:
- Suspended four branch employees suspected of involvement.
- Filed a police complaint and informed law-enforcement agencies as part of preliminary action.
- Reported the matter to regulators and statutory auditors.
- Initiated a forensic audit by appointing an independent external agency (such as KPMG) to conduct a detailed probe into the transactions and internal controls.
- Sent “recall requests” to other banks to lien-mark balances in suspicious accounts that may be linked to the fraudulent transactions.
- The bank’s board also convened special committees and audit panels to closely monitor the progress of the investigation.
The accounts implicated in the fraud belonged to various government entities of the Haryana state.
Public funds were being held at the Chandigarh branch for government use, and the discrepancies only surfaced when departments sought to shift funds out of the bank.
Following this disclosure, the Haryana government issued a directive instructing all departments to stop government business with IDFC First Bank (and AU Small Finance Bank). The government’s finance department stated that no funds will be parked, deposited, invested, or transacted through these banks until further notice, and departments were asked to shift balances immediately.
Market Reaction & Broader Impact
The revelation of the fraud had an immediate impact on financial markets.IDFC First Bank stock fell as much as 20 per cent during the day to ₹66.8 per share, the lowest level since June 2025. This is compared to a 0.65 per cent advance in Nifty 50 as of 09:48 AM. The counter has fallen 22 per cent this year, compared to a 1.6 per cent decline in the benchmark Nifty 50. IDFC First Bank's total market capitalisation fell to ₹57,485.6 crore.
Analysts have stressed that the final financial impact will depend on outcomes of the forensic audit, legal action, and recovery efforts — including how much of the questionable ₹590 crore can be traced and recovered.
What the bank said: “This is a specific, isolated incident that occurred at one branch with one client group. This is essentially a case where debit instructions were purportedly received from the client, and our personnel — which clearly indicates fraudulent activity to us — processed the entries and transferred the money from the client’s account to certain parties outside the bank,” V Vaidyanathan, MD & CEO, IDFC First Bank told
Business Standard. What This Means for Bank Customers & Public Funds
The IDFC First Bank fraud case highlights several important issues:
Internal Controls Matter: Even in well-regulated institutions, lapses in oversight can enable large-scale fraud, especially if collusion is involved.
Public Funds Require Extra Safeguards: Government accounts require stringent reconciliation and oversight since discrepancies directly affect public resources.
Investors Watch Governance: Such incidents can erode investor confidence, especially when tied to operational risk and risk management practices.
Investigations Evolve: The ₹590 crore figure is based on preliminary reconciliation. Final amounts, causes, and liabilities will be determined through detailed forensic investigation and legal proceedings.
In Simple Terms
The fraud at IDFC First Bank’s Chandigarh branch is not a typical “hack” or market loss — it appears to involve insider or collusive actions by staff affecting government deposit accounts, leading to large discrepancies in recorded versus actual money held. The bank is treating it as a serious internal breach, involving regulatory reporting, police complaints, and independent audit oversight. Is your money at risk?
Based on the bank’s official disclosures so far, the suspected fraud appears to be limited to certain government-linked accounts at one branch.
There is no indication that retail savings accounts, fixed deposits, or regular customers across India are directly affected.
Banks in India are also regulated by the Reserve Bank of India (RBI), and customer deposits up to ₹5 lakh per depositor per bank are insured under the DICGC scheme.
At this stage, there is no advisory asking retail customers to withdraw funds.
What should retail customers do now?
If you are an IDFC First Bank customer:
Continue monitoring official communication from the bank
Avoid reacting to unverified social media rumours
Keep deposits diversified across banks as a general safety practice
Ensure your deposits are within insured limits if you are conservative
There is no regulatory restriction on withdrawals at present.
 "₹590 cr fraud at IDFC First Bank's Chandigarh branch: Is money at risk?")
