Massive ₹590-Crore Fraud Uncovered at IDFC First Bank’s Chandigarh Branch; Four Officials Suspended

A major financial irregularity has rocked private banking as IDFC First Bank disclosed a ₹590-crore fraud involving accounts linked to the Haryana government at its Chandigarh branch. The lender has placed four officials under suspension and filed a police complaint as authorities and investigators probe the case.

The fraud came to light when a Haryana government department sought to close a banking account and move its funds to another institution. During the process, discrepancies were noticed between the actual balances and what was recorded in official books. Subsequent checks by other government entities revealed similar inconsistencies in several accounts held with the bank.

According to regulatory filings by the bank, the ₹590 crore figure represents the aggregate amount under reconciliation across these identified accounts. Initial investigations suggest that unauthorised and potentially fraudulent activities were conducted by certain branch employees and external parties.

IDFC First Bank has stressed that the issue appears confined to this specific cluster of government-linked accounts and does not extend to other customers at the Chandigarh branch. The bank has also initiated legal action, including recall requests to beneficiary banks to lien-mark suspected funds, and has appointed an external agency to carry out a forensic audit.

In response to the revelations, the Haryana government has de-empanelled IDFC First Bank and AU Small Finance Bank for state government business, directing departments to close their accounts and move funds to nationalised banks.

Market reaction has been sharp, with investors concerned about the implications for governance and internal controls at private lenders. Analysts say while the fraud is sizeable, the bank’s prompt reporting and attempts at recovery may help limit long-term damage.

The case is now under detailed investigation by law enforcement and regulatory authorities, with further action expected as the probe unfolds.