In a regulatory filing made on Sunday, the private sector bank said that based on a preliminary internal assessment (upon receipt of communication from a particular Department of Government of Haryana), the bank has identified an incident involving unauthorized and fraudulent activities by certain employees at a particular branch in Chandigarh and potentially involving other counterparties.

Detailing the events that led to the aforementioned discover, the bank stated that it had received a request from a particular Department of Haryana Government for closure of its account and transfer of funds to another bank. In the process, certain discrepancies were observed in the amount mentioned vis-'-vis the balance in the account.

From 18 February 2026 onwards, certain other Haryana Government entities engaged with the Bank with regard to their respective accounts with the bank.

During this process, differences were observed between the balances in the account and the balances as mentioned by the said Haryana Government entities holding accounts with the bank.

Based on the preliminary internal review conducted, the bank said that the matter was confined to a specific group of government-linked accounts within Haryana Government operated through the said branch in Chandigarh and do not extend to other customers of the Chandigarh Branch.

The aggregate amount under reconciliation across the identified accounts at the above mentioned Branch is approximately Rs 590 crore, the bank stated.

The impact may be determined based on receipt of further information, validation of claims, recoveries of any nature including those made through the process of marking lien on fraudulent beneficiary accounts maintained with other banks, liabilities of other entities involved in the fraudulent transactions, and the legal recovery process.

The bank has placed four suspected officials under suspension pending investigation. The bank will pursue strict disciplinary, civil and criminal action against the employees and other external individuals responsible, in accordance with applicable law.

A meeting of the special committee of the board for Monitoring and Follow-up of Cases of Frauds (SCBMF) was convened on 20 February 2026 and the matter was placed before the committee.

The meeting of the audit committee and the board of directors were convened on 21 February 2026 to apprise on the matter. The statutory auditors have been informed.

The bank has filed a complaint with the Police authorities and will extend full cooperation to the investigating agencies.

The bank has sent recall request to certain beneficiary banks to lien mark balance in suspicious accounts held in these banks.

In a separate filing, IDFC First Bank said that the bank has appointed KPMG to initiate an independent forensic audit in aforementioned matter.

IDFC Bank is a universal bank, offering financial solutions through its nationwide branches, Internet, and mobile. The bank provides customized financial solutions to corporations, individuals, small and micro enterprises (SMEs), entrepreneurs, financial institutions, and the government.

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