IDFC First Bank has assured the Haryana government that it will soon repay ₹590 crore following the detection of a major fraud at its Chandigarh branch. The discrepancy surfaced after a state government department initiated the closure of its account and found a mismatch between the reported balance and the actual funds available. Subsequent reconciliations revealed additional shortfalls, taking the total exposure to ₹590 crore.

Key Highlights

• IDFC First Bank will soon repay ₹590 crore following detection of fraud at its Chandigarh branch.
• Bank tightens controls, orders forensic audit, and strengthens transaction monitoring to prevent future operational risks.

During an analyst call, the bank’s management acknowledged the lapse and stated that it would fully compensate the affected government departments. The leadership emphasised that the incident was isolated and resulted from alleged collusion between certain employees and external entities. The bank has suspended the staff involved, filed police complaints, informed regulators, and appointed KPMG to conduct a forensic audit, with findings expected within weeks.

To strengthen internal controls, IDFC First Bank announced new measures, including mandatory digital confirmation for high-value branch transactions and enhanced checks supported by artificial intelligence for signature verification. These steps aim to prevent future operational risks and reinforce transaction security.

Also Read: IDFC First Bank Shares Slide Amid Fraud Allegations

The disclosure triggered a sharp reaction in the stock market, with shares of the bank falling nearly 20% during intraday trading before closing lower by about 16%, marking the steepest decline since the pandemic period. Despite the setback, management reiterated that government deposits account for a small portion of the bank’s overall deposit base and maintained confidence in its financial stability.

The bank has pledged full cooperation with law enforcement agencies and remains focused on restoring stakeholder confidence through swift corrective action and governance reforms.