IDFC First Bank hit by ₹590-crore fraud at its Chandigarh branch

IDFC First Bank has reported a ₹590-crore fraud involving bank officials and certain individuals employed at a particular branch in Chandigarh, potentially in collusion with other individuals and entities. The fraud amount involves bank accounts held by certain departments of the Haryana government.

The fraud amount is nearly 39% of the private sector bank’s full-year profit of ₹1,526 crore in FY25. Incidentally, the bank's credit costs in Q3FY26 had improved 19 bps QoQ to around 2.05%, while gross slippage (excluding microfinance book) stood at 3.09%. The bank, however, has a strong capital adequacy: of 16.22% with common equity tier 1 of 14.23%, which includes 9-month profits of FY26.

Four suspected officials have been placed under suspension pending investigation.

The bank in a filing to the exchange stated that the aggregate amount under reconciliation across the identified accounts is approximately ₹590 crore, but the impact may be determined based on receipt of further information. This would involve 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.

Prima facie, unauthorised and fraudulent activities have been carried out by certain employees at a branch in Chandigarh in a specific set of Haryana state government accounts and potentially involving other individuals / entities/ counterparties.

The bank has informed its regulator, filed a complaint with the police and is also in the process of filing further complaints with appropriate law enforcement agencies and reporting to relevant authorities. The bank is in the process of appointing an independent external agency to conduct an independent forensic audit.

The bank has stated that it will pursue strict disciplinary, civil and criminal action against the employees and other external individuals responsible, in accordance with applicable law.

The stock, which is down 3% YTD, is likely to open in the red on Monday.