IDFC First Bank Reports INR 590 Crore Fraud in Haryana Government Accounts

At its Chandigarh branch, IDFC First Bank Ltd. disclosed a discrepancy of INR 590 crore in deposits held on behalf of the Haryana Government. Four workers have been designated as suspects by the bank and suspended while an investigation is conducted. The application by the bank follows a February 18 directive from the state to its departments to terminate accounts with private lenders.

After the lender notified regulators and filed a police complaint, the issue was brought to the attention of the bank's board at a hurried meeting on February 21. Additionally, it has notified its statutory auditors and started the process of selecting a third-party, independent organisation to carry out a forensic audit.

Bank Already Informed the Stock Exchange

To further investigate questionable accounts, specific beneficiary banks have been sent recall requests to lien mark the sums. The bank has uploaded the disclosure on its website and has also informed the stock exchanges in accordance with Regulation 30 of the SEBI Listing Regulations. The bank has stated that the problem does not affect other clients at the Chandigarh branch and is limited to a particular group of Haryana Govt-linked accounts based on an initial internal examination.

Approximately Rs 590 crore is the total sum that needs to be reconciled across all of the specified accounts. The final effect will be determined by the results of judicial recovery proceedings, the validity of claims, and recoveries, which may involve lien-marking amounts in beneficiary accounts held with other banks. Other parties engaged in the transactions may also have liabilities.

Haryana Govt Shifting From Private to Nationalised Banks

The government of Haryana has instructed that all of its accounts with certain private banks, mainly IDFC First Bank and AU Small Finance Bank, be closed starting from February 18, 2026. All government agencies, boards, corporations, and educational institutions are required to move their money to nationalised banks. Hence, any attempts to use private bank accounts must first be approved by the finance department.

This comes after allegations of financial wrongdoing, like a INR 590 crore scam involving IDFC's Chandigarh branch that was responsible for Haryana accounts, led to the de-empanelment of these banks from government contracts. Preserving public funds is its first priority; thus, it ensures that all funds are properly parked and reconciled on a monthly basis.