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Massive Fraud Unearthed in Haryana Govt Accounts at Chandigarh Branch
Chandigarh: In a major banking scandal, IDFC First Bank has disclosed a massive fraud of approximately ₹590 crore involving accounts linked to the Haryana Government, allegedly carried out by its own employees in collusion with external entities. The fraud was detected at a specific branch in Chandigarh and has triggered regulatory, criminal, and forensic investigations.
Four Bank Officials Suspended, Forensic Audit Ordered
Following preliminary findings, the bank has suspended four officials pending investigation and assured strict disciplinary, civil, and criminal action against those responsible. The lender clarified that the fraud appears to be confined to a specific set of Haryana Government-linked accounts operated through the Chandigarh branch and does not affect other customers.
The bank has launched a comprehensive reconciliation exercise to determine the final fraud amount, which currently stands at ₹590 crore and may change based on recoveries and claim validations.
As part of immediate recovery measures, IDFC First Bank has issued recall requests to beneficiary banks and asked them to lien-mark suspicious accounts where funds may have been diverted. Statutory auditors have been informed, and the bank has initiated an independent forensic audit through an external agency to uncover the modus operandi, identify beneficiaries, and trace the fund trail.
The matter has also been placed before the bank’s Special Committee of the Board for Monitoring and Follow-up of Fraud Cases, along with the audit committee and board of directors, underscoring the seriousness of the breach.
Serious Governance Concerns Amid Strong Financial Performance
The revelation has raised serious concerns over internal controls and governance mechanisms, especially given the scale and nature of the fraud involving government funds.
Ironically, the disclosure comes at a time when IDFC First Bank has been reporting strong financial growth. For the quarter ending December 31, 2025, the bank reported a 48 per cent surge in net profit to ₹503 crore, along with a 24 per cent rise in total deposits and a significant increase in low-cost CASA deposits.
The bank’s shares had closed at ₹83.56 on the BSE on Friday, registering modest gains ahead of the disclosure.
Investigating agencies are now expected to probe the roles of insiders and external collaborators, as well as possible systemic loopholes that allowed the fraud to continue undetected. The forensic audit findings will be crucial in establishing accountability and determining whether the fraud involved organised diversion of public funds. The case marks one of the most significant banking frauds involving state government accounts in recent years and is likely to trigger tighter scrutiny of internal banking controls and public fund management systems.
