IDFC FIRST Bank flags ₹590 cr suspected fraud at Chandigarh branch

IDFC FIRST Bank reported a suspected ₹590 crore fraud at its Chandigarh branch involving Haryana government-linked accounts. Four employees have been suspended, and a forensic audit is underway

Private sector lender IDFC First Bank on Sunday said it has detected a Rs 590 crore fraud at one of its branches in Chandigarh pertaining to accounts related to the Haryana State Government, and has suspended four of its employees.

 

The discrepancies came to notice after one of the state government departments wanted to close its bank account with IDFC First Bank and transfer the funds to another bank, but the amount mentioned by the department was not the same as balances in the account.

 

A bank has to set aside capital, in terms of provisioning, once a fraud is detected. The quantum of fraud detected by the bank is more than the net profit it reported in the October–December quarter of 2025–26, which was Rs 503 crore.

   

In a regulatory filing to the exchanges, the bank said it is in the process of appointing an independent external agency to conduct a forensic audit. The regulator and statutory auditors have been informed about the fraud, it said.

 

The Mumbai-based lender said a preliminary internal assessment identified “unauthorised and fraudulent activities” carried out by certain employees at a specific branch in Chandigarh, potentially in collusion with other individuals or entities.

 

The matter surfaced after a department of the Government of Haryana requested closure of its account and transfer of funds to another bank. During the process, the bank said discrepancies were observed between the amount mentioned in the request and the account balance.

 

Subsequently, other Haryana government entities approached the bank regarding their respective accounts starting from 18 February 2026. Differences were again observed between the balances reflected in the bank’s records and those stated by the account holders.

 

“Prima facie, unauthorised and fraudulent activities have been carried out by certain employees at a particular branch in Chandigarh in a specific set of Haryana State Government accounts and potentially involving other individuals, entities or counterparties,” the bank said, clarifying it does not extend to other customers of the branch.

 

“The aggregate amount under reconciliation across the identified accounts at the above-mentioned branch is approximately Rs 590 crore,” the bank said in its filing. It added that the final financial impact will be determined after validating claims, recovery efforts — including lien marking on beneficiary accounts maintained with other banks — and completing legal proceedings.

 

The bank also said recall requests have been sent to certain beneficiary banks to lien-mark balances in suspicious accounts.

 

The lender suspended four suspected officials pending investigation and said it would pursue strict disciplinary, civil and criminal action against responsible employees and external individuals.

 

A meeting of the Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds was convened on 20 February 2026. The matter was subsequently placed before the Audit Committee and the Board of Directors at a meeting held on 21 February 2026.

 

IDFC First Bank said it has filed a complaint with police authorities, and is also in the process of filing further complaints with appropriate law enforcement agencies and reporting to relevant authorities. The bank said it would extend full cooperation to investigating agencies.

 

The bank’s share closed at Rs 83.56 on Friday, up 0.72 per cent compared to its previous close.