IDFC First Bank on Sunday reported a Rs 590-crore fraud involving accounts held by the Haryana Government with the private lender. The bank said the fraud was carried out by some of its employees along with other individuals.
In a regulatory filing made in the early hours, the bank said it had informed the banking regulator about the matter and had also lodged a police complaint. The filing stated that, prima facie, unauthorised and fraudulent transactions were carried out by certain employees at a specific branch in Chandigarh.
These transactions were linked to a set of Haryana government accounts and may also have involved other individuals, entities, or counterparties. The bank said the fraud amount is currently estimated at Rs 590 crore. It added that a reconciliation exercise is underway and the final figure will be determined after further information is received, claims are validated, and recoveries are made.
Explaining how the issue came to light, the bank said a Haryana government department had been banking with it and had requested closure of accounts and transfer of the balance to another bank.
During this process, discrepancies were noticed between the amount mentioned and the actual balance in the accounts. The bank said similar discrepancies were later found in other Haryana government-linked accounts that engaged with the branch from February 18 onwards.
The bank conducted a preliminary internal review and said the issue was confined to a specific group of Haryana government-linked accounts handled through the Chandigarh branch. It clarified that the fraud did not impact other customers of the branch.
"The aggregate amount under reconciliation across the identified accounts at the abovementioned branch is approximately Rs 590 crore," it disclosed.
Four officials of IDFC First Bank have been suspended pending investigation. The bank said strict disciplinary, civil, and criminal action will be taken against employees and any external individuals found responsible.
As part of recovery efforts, the bank has sent recall requests to certain beneficiary banks, asking them to mark a lien on balances in suspicious accounts held with them. The bank said its statutory auditors have been informed. It also plans to conduct an independent forensic audit by appointing an external agency.
After detecting the issue, the bank placed the matter before its Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds on February 20. The audit committee and the board were informed the following day.
Shares of IDFC First Bank rose 0.72 per cent to close at Rs 83.56 on the BSE on Friday, compared with a 0.38 per cent gain in the benchmark index. For the quarter ended December 31, 2025, the bank reported a 24 per cent rise in deposits, including a 33 per cent increase in low-cost current and savings account deposits. Its net profit rose 48 per cent to Rs 503 crore in the October-December period.
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