Source Reuters
CHANDIGARH – IDFC First Bank has launched a high-level investigation into a suspected fraud involving approximately ₹590 crore ($70 million) across accounts belonging to various Haryana government entities. The private lender confirmed on Sunday that the irregularities were localized to its Chandigarh branch.
The discrepancy was discovered on February 18, 2026, when a specific department of the Haryana government requested the closure of its account and the transfer of funds to another bank. During the reconciliation process, bank officials noticed a significant mismatch between the balance recorded in the bank’s system and the amount claimed by the government department.
Internal Breach and Immediate Actions
The bank’s preliminary internal review suggests that the “unauthorized and fraudulent activities” were carried out by a small group of employees at the Chandigarh branch. These activities allegedly involved manipulating state government accounts and potentially collaborating with external parties.
In response, IDFC First Bank has taken the following steps:
Employee Suspensions: Four officials suspected of involvement have been placed under immediate suspension pending a full inquiry.
Legal Action: The bank has filed a formal complaint with the police and notified the Special Committee of the Board for Monitoring Frauds.
Forensic Audit: An independent external agency is being appointed to conduct a comprehensive forensic audit to determine the exact scale of the siphoning.
Fund Recovery: Recall requests have been sent to several beneficiary banks to “lien-mark” (freeze) balances in suspicious accounts to facilitate recovery.
Scope of the Impact
In a filing with the stock exchanges, IDFC First Bank emphasized that the issue is isolated to a specific set of government-linked accounts.
“The fraudulent activities were confined to a specific group of Haryana Government-linked accounts operated through the Chandigarh branch and do not extend to other customers of the branch or the bank’s broader operations,” the lender stated.
The Haryana government has since reportedly directed all its departments, boards, and corporations to shift their accounts from private lenders to nationalized banks, effective immediately.
Financial Outlook
Despite the investigation, the bank remains well-capitalized. The eventual financial impact will depend on the validation of claims and the success of recovery proceedings. In the most recent quarter (Q1 FY26), IDFC First Bank reported a profit after tax of ₹463 crore, though it faced some pressure due to stress in the microfinance segment.
