IDFC First Bank flagged a major fraud case at its Chandigarh branch, where certain employees allegedly carried out unauthorized transactions totaling around ₹590 crore in specific Haryana state government accounts. The lender made the revelation in a filing to the BSE on February 21, following an initial internal assessment triggered by communication from a Haryana government department.

The bank stated that the aggregate amount across the affected accounts at the branch stands at approximately ₹590 crore, currently under reconciliation. Officials at the bank emphasized that the full financial impact remains unclear. Further details will depend on additional information, claim validations, recoveries from lien-marked fraudulent beneficiary accounts at other banks, and liabilities of involved entities, according to the filing.

Prima facie evidence points to unauthorized activities by specific employees at the Chandigarh location. The fraud potentially extends to other individuals or entities outside the bank. Haryana government authorities issued an alert, prompting the bank’s probe. The state department’s communication highlighted irregularities in certain accounts handled at the branch.

Bank representatives noted that recovery efforts are underway. This includes marking liens on suspicious beneficiary accounts held elsewhere and pursuing legal channels against implicated parties. No arrests or charges have been announced yet. The incident highlights vulnerabilities in handling government funds at commercial bank branches.

IDFC First Bank, which operates over 700 branches across India, assured investors that the matter is contained to one location. The lender’s shares dipped slightly after the disclosure but recovered by midday trading on February 21. Regulators have not commented publicly. Haryana officials confirmed their role in flagging the issue but provided no further details.

The scandal emerges amid heightened scrutiny on banking frauds in India. Last year, public sector banks reported losses exceeding ₹10,000 crore from similar internal collusions. Private lenders like IDFC First have faced pressure to strengthen compliance amid rapid expansion. The Reserve Bank of India mandates swift reporting of such incidents, which the bank followed here.

Investigators are piecing together the timeline. Transactions reportedly spanned months, disguised as routine government disbursements. Affected accounts include those for state welfare schemes and departmental payments. Bank insiders described the scheme as sophisticated, involving falsified documentation and beneficiary details.

Chandigarh police have not confirmed an official probe, though sources say coordination with banking regulators is likely. IDFC First Bank’s board will review the matter at its next meeting. Customers with accounts at the branch face no immediate risks, the bank said. Full audits of similar government-linked accounts nationwide are now in motion.