The Reserve Bank of India (RBI) has responded to the ₹590‑crore fraud disclosed by IDFC FIRST Bank, emphasising that the incident appears to be an isolated case and does not indicate a broader systemic issue in the Indian banking sector. RBI Governor Sanjay Malhotra said the central bank is closely monitoring developments related to the fraud, which was uncovered at a Chandigarh branch involving government‑linked accounts.
Addressing the media after a post‑budget press briefing, Malhotra reiterated that RBI’s policy is not to comment on individual banks but made a point of assuring investors and the public that the fraud does not pose systemic risk. He noted that the fraudulent activity was limited to a specific set of Haryana government deposits and did not extend to other customers or branches.
The fraud came to light when a state government department requested account closure and discovered a large discrepancy in balances. IDFC FIRST Bank immediately suspended four employees believed to be involved and initiated internal reviews, while also appointing a forensic auditor to investigate the matter.
Despite the RBI’s reassurance, the bank’s share price plunged sharply after the disclosure — at one point dropping nearly 20 % — highlighting market concerns about governance and oversight. Meanwhile, the Haryana government has de‑empanelled IDFC FIRST Bank for government business and ordered transfers of public funds to other authorised banks.
Governor Malhotra’s comments reflect RBI’s intent to maintain financial stability and confidence, underscoring that robust capital buffers and regulatory oversight remain in place to protect the broader banking system.
