IDFC First Bank has reported the detection of suspected fraudulent transactions amounting to approximately ₹590 crore at its Chandigarh branch. The irregularities were identified in accounts linked to Haryana government departments. Four bank officials have been suspended pending investigation, and the bank has initiated both internal and external audits. The Haryana government has referred the matter to the state crime branch for further investigation, and the bank has filed a police complaint.
According to Financial Express, the suspected fraud came to light when a Haryana government department requested closure of its account and transfer of funds. During this process, discrepancies were observed between the account balance in the bank’s system and the amount stated by the department.
A subsequent internal review revealed further inconsistencies across several accounts operated through the Chandigarh branch.
As reported by Hindustan Times, the bank’s regulatory filing stated that the aggregate amount under reconciliation across the identified accounts is approximately ₹590 crore. The accounts in question are linked to the Haryana government’s development and panchayats department. The bank clarified that the issue is confined to a specific group of government-linked accounts and does not affect other customers.
The bank has appointed KPMG to conduct a forensic audit, and its statutory auditors have been informed as coverage revealed. The Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds (SCBMF) convened on 20 February 2026, followed by meetings of the audit committee and board of directors. The bank has also sent recall requests to beneficiary banks to mark liens on suspicious accounts.
“We will get to the bottom of this and spare no one found responsible. KPMG has been appointed to conduct a forensic audit. The bank is in a fundamentally strong position — it is well capitalised, profitability is on a positive trajectory, and our operating profit has crossed 2%,” said V. Vaidyanathan, CEO of IDFC First Bank.
The Haryana government issued instructions on 18 February 2026, de-empanelling IDFC First Bank and AU Small Finance Bank from handling government business. The directive required all departments to transfer balances and close accounts with these banks as analysis showed. No specific reason was cited for the de-empanelment in the official communication.
In its regulatory filing, IDFC First Bank stated that the financial impact will be determined after further information is received, claims are validated, and recoveries are made, including those through marking liens on fraudulent beneficiary accounts. The bank has committed to pursuing strict disciplinary, civil, and criminal action against employees and any external individuals found responsible as details emerged.
“The matter was confined to a specific group of government-linked accounts operated through a Chandigarh branch and does not extend to other customers of the branch,” the bank clarified in its filing.
Market analysts are closely monitoring the situation, as the ₹590 crore figure exceeds the bank’s net profit of ₹503 crore for the December quarter. The bank’s management has scheduled a conference call to address investor concerns and provide further clarity on the ongoing investigation according to reporting indicated.
Note: This article is produced using AI-assisted tools and is based on publicly available information. It has been reviewed by The Quint's editorial team before publishing.