The stock ofIDFC First Banksuffered a heavy setback onMonday, 23 February 2026, with shares tumbling as much as20% and hitting the lower circuitlimit on theNational Stock Exchange of India.
The steep decline came after the bank disclosed it had uncovered asuspected ₹590 crore fraudat a Chandigarh branch involving accounts operated on behalf of entities of theGovernment of Haryana. A routine account closure request by a government department led to the discovery of discrepancies between the actual balances and books, prompting the bank to launch an internal investigation.
In response to the findings, the banksuspended four employeesbelieved to be involved and reported the matter to regulators, police authorities, and statutory auditors. It has also appointed an independent firm to conduct a detailed forensic audit.
Investors reacted sharply to the news, fearing lapses in internal controls and risk management. This eroded confidence triggered widespread selling pressure, wiping out significant market value in just one trading session — with estimates suggesting over₹14,000 crore in market capitalisation was lost.
Although the bank has stated the issue is isolated and does not affect other customer segments, the involvement of government accounts and the size of the irregularity has raised governance concerns. TheReserve Bank of Indiaand other authorities are closely monitoring the situation.
The unprecedented drop in share price underscores how sensitive the banking sector can be to fraud disclosures, even when the direct financial impact may be limited. Investor focus will now likely shift to updates from the forensic audit and clarity on potential fund recoveries and regulatory outcomes.
