Shares of IDFC First Bank tumbled as much as 10% in opening trade on Monday after the lender disclosed an alleged ₹590-crore fraud involving certain Haryana government-related accounts operated through its Chandigarh branch. Investor sentiment was further hit after the Haryana government on Sunday de-empanelled the private lender, along with AU Small Finance Bank, from undertaking any government business with immediate effect.

Weighed down by the developments, IDFC First Bank shares were locked in the 10% lower circuit at ₹75.21 on the BSE, taking its market capitalisation to ₹64,674.52 crore.

In a similar trend, shares of AU Small Finance Bank declined up to 6.18% to ₹965.30, with its market capitalisation slipping to ₹72,547 crore.

IDFC First Bank had touched a 52-week high of ₹87 on January 2, 2026, and a 52-week low of ₹52.50 on April 7, 2025. Meanwhile, AU Small Finance Bank hit a 52-week high of ₹1,038.75 on February 19, 2026, and a 52-week low of ₹479 on March 18, 2025.

The sell-off in the two private lenders followed the Haryana government’s directive that no funds will be parked, deposited, invested or transacted through the banks until further orders. All departments, boards and state-run organisations have been instructed to immediately transfer existing balances and close accounts maintained with them.

“IDFC First Bank and AU Small Finance Bank are hereby de-empanelled for government business in Haryana with immediate effect till further orders,” the notice stated, according to a circular issued by the state’s Finance Department.

The action came after IDFC First Bank informed exchanges that it had identified a suspected fraud of around ₹590 crore in certain Haryana government-linked accounts operated through its Chandigarh branch.

The bank further disclosed that it has appointed KPMG to conduct an independent forensic audit after detecting alleged unauthorised and fraudulent transactions at the branch.

“The bank is in the process of appointing an independent external agency to conduct a forensic audit. In furtherance of the same, we wish to inform you that the Bank has appointed KPMG to initiate an independent forensic audit in this matter,” it said in a regulatory filing.

According to the filing, the irregularities surfaced after a Haryana government department requested closure of its account and transfer of funds to another bank. During the process, discrepancies were observed between the amount sought for transfer and the balance reflected in the account, prompting further investigation.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)