IDFC Settles Chandigarh Branch Fraud Claims at ₹645 Crore

The announcement, which is disclosed in a regulatory filing on Tuesday, aims at putting investors and customers at ease after a season of speculation. The bank has made it clear that the balance of all the relevant accounts in the branch has already been settled and no additional discrepancies have been detected. Notably, the lender has not received any new claims by any entity in the country since February 25.

The Origin of the Crisis

The fraud was initially detected in February 2026 when a government department in Haryana demanded to close its account and transfer the money to a different institution. In the course, the bank officials detected a huge gap between the balance in the core banking system and the one declared by the government entity.

Later in-house investigations revealed a messy network of illegal dealings. It has been noted that 391 transactions of suspects were discovered, and they involved about 170 accounts. The main victims were the accounts of the Haryana government and its different departments, such as the State Pollution Control Board and the Haryana Power Generation Corporation.

Modus Operandi and Arrests

It is claimed that the scam was a conspiracy by one of the former branch managers in conspiring with other staff and outsiders. Probers of the Haryana State Vigilance and Anti-Corruption Bureau established that they had siphoned funds with forged cheques and fictitious debit instructions. The cheques in many cases had forged signatures of one of the late IAS officers who had disengaged himself several months back.

It is estimated that 300 crore of the stolen money was deposited in the bank accounts of Swastik Desh Projects, a private company owned by the relatives of a former relationship manager of the bank. By now, a number of people have been arrested, including the former manager in charge of the branch and an official working in a government department who is said to have served as a middleman.

Financial and Regulatory Impact

Although the extent of the misappropriation was large enough to cause an initial 20 per cent decrease in the stock price of the bank, IDFC First Bank still believes that it is financially sound. According to the bank, its aggregate deposit balance was 2,92,381 crore as at 28 February, and this is stable compared to the previous quarter. Its Liquidity Coverage Ratio (LCR) is keeping a comfortably high level of 114%. However, the act has had administrative consequences. 

Recently, the Haryana government has taken IDFC First Bank off its list of empanelled lender to state business. The case has been used by industry experts as an example of poor oversight, and the banks are urged to tighten the knots to deter the presence of insider-driven fraud.

Moving Forward

The global auditing firm KPMG has been contracted by IDFC First Bank to do an independent forensic investigation into the issue. The audit will give a comprehensive account of the transactions and is likely to detect any systemic weaknesses that facilitated the commission of the fraud.

Although the bank has paid 100 per cent of the principal and interest owed by the government of Haryana in order to protect its image, it has shifted its focus now to recovery. The lender is actively seeking to sue the perpetrators and has been urging beneficiary banks to freeze the accounts of the suspected persons in a move to recover the stolen money. In the meantime, the bank continues to argue that the incident was a one-off and will not impose any systemic risk to its overall operations.

Also Read: Grandma Throws Boiling Water on 4-Year-Old Over Holi Colors