IDFC First Bank is in the spotlight after admitting that a suspected₹590 crore fraudwas detected in accounts maintained at its Chandigarh branch, primarily linked to departments of the Government of Haryana. What began when a government entity requested account closure — revealing discrepancies between reported and actual balances — quickly escalated into a full‑scale fraud investigation announced in a regulatory filing.
According to the bank, initial review suggests thatunauthorised and fraudulent transactions were carried out by certain employees and potentially with outside parties, and the issue appears confined to a group of government‑linked accounts. In response,four officials have been suspended pending investigationand the lender will pursue strict disciplinary, civil and criminal action against those responsible.
IDFC First Bank has alsofiled a police complaint, informed regulatory authorities, and appointed an independent agency (KPMG) to conduct a forensic auditinto the suspected irregularities. As part of recovery efforts, the bank has sentrecall and lien‑mark requests to beneficiary bankswhere suspicious accounts are present.
The incident has shaken investor confidence:shares of the bank plunged sharply — hitting lower circuits and wiping out large chunks of market capitalisation— as traders reacted to governance concerns and the size of the possible fraud.
Although the bank insists the issuedoes not impact other customers of the branchand that its financial buffers remain strong, the case has raised broader questions about internal controls at the lender and the handling of public‑sector accounts. The bank and regulators are now focused on the outcome of the forensic audit, potential recoveries, and steps to prevent similar incidents.