IDFC FIRST Bank has flagged a potential Rs 590-crore fraud at one of its branches in Chandigarh involving accounts linked to departments of the Government of Haryana, and has suspended four officials pending investigation.
In a disclosure to stock exchanges under SEBI’s Listing Regulations on February 21, the bank said it identified “unauthorised and fraudulent activities” by certain employees at a specific branch in Chandigarh, potentially in collusion with other individuals, entities or counterparties.
The issue surfaced after the bank received a request from a Haryana government department seeking closure of its account and transfer of funds to another bank. During the process, discrepancies were observed between the amount mentioned in the request and the balance reflected in the account.
Subsequently, from February 18 onwards, certain other Haryana government entities engaged with the bank regarding their respective accounts. Differences were again observed between the balances in the bank’s records and the balances cited by the entities.
According to the bank’s preliminary internal review, the matter is confined to a specific group of government-linked accounts operated through the Chandigarh branch and does not extend to other customers of the branch.
The aggregate amount under reconciliation across the identified accounts is around ₹590 crore. The bank said the final impact would depend on further information, validation of claims, recoveries — including through lien marking on suspected beneficiary accounts maintained with other banks — liabilities of other entities involved in the transactions, and the outcome of legal recovery proceedings.
The bank has convened meetings of its Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds (SCBMF), the Audit Committee, and the Board of Directors on February 20 and 21 to apprise them of the developments. It is also in the process of appointing an independent external agency to conduct a forensic audit, and has informed its statutory auditors.
In addition, the bank has filed a complaint with the police and said it will extend full cooperation to investigating agencies. Recall requests have also been sent to certain beneficiary banks to lien-mark balances in suspicious accounts.