Gurugram, February 22: IDFC First Bank has disclosed a massive financial fraud amounting to approximately INR 590 crore at its Chandigarh branch, primarily involving accounts linked to the Haryana government. In a regulatory filing on Saturday, February 21, the private lender revealed that a preliminary internal assessment identified unauthorised activities by a group of employees. The bank has immediately suspended four officials suspected of involvement and has filed a formal complaint with police authorities to initiate a criminal investigation.

The irregularities came to light starting February 18, 2026, when a specific department of the Haryana government requested the closure of its account and the transfer of funds to another institution. During this routine process, bank officials noticed a significant discrepancy between the balance reflected in the bank's records and the amount claimed by the government entity. Following this discovery, other state departments holding accounts at the same branch were audited, revealing a widespread pattern of unauthorised transactions and balance mismatches. IDFC First Bank Exposes INR 590 Crore Fraud at Chandigarh Branch Involving Haryana Government Accounts, 4 Officials Under Scanner.

IDFC First Bank Reports INR 590 Crore Massive Fraud

IDFC First Bank Reports INR 590 Crore Massive Fraud

IDFC First Bank has clarified that the fraudulent activities appear to be confined strictly to a specific group of government-linked accounts operated through the Chandigarh branch. The lender emphasised that the incident does not affect individual retail customers or other branches. To mitigate losses, the bank has issued recall requests to several beneficiary banks, asking them to "lien mark" or freeze balances in suspicious accounts where the defrauded funds were allegedly funneled.

  • Suspensions: Four employees have been placed under immediate suspension pending further investigation.

  • Forensic Audit: The bank is in the process of appointing an independent external agency to conduct a comprehensive forensic audit.

  • Law Enforcement: A police complaint has been registered, and the bank is cooperating with investigating agencies to trace the money trail.

Haryana Government Response and Impact

The Haryana government has reacted sharply to the disclosure. On February 18, the state’s Finance Department issued an urgent memorandum effectively de-empanelling IDFC First Bank (along with AU Small Finance Bank) for all government business in the state. Administrative secretaries and heads of departments have been instructed to stop all new deposits and transactions through these banks until further orders. RBI New Customer Fraud Guidelines: Reserve Bank of India Proposes Fraud Compensation, Curbs Mis-Selling.

The state has also directed all government boards, corporations, and PSUs to conduct a mandatory reconciliation of their bank accounts and fixed deposits by March 31, 2026. This move follows observations that certain departments were not regularly verifying their account statements, which may have allowed the irregularities to go undetected for an extended period.

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(The above story first appeared on LatestLY on Feb 22, 2026 11:11 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).