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Informist, Monday, Feb. 23, 2026

 

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--IDFC FIRST Bank: Acted decisively against fraud at Chandigarh branch 
--IDFC FIRST Bank: Will get to the bottom of fraud at Chandigarh branch 
--CONTEXT:IDFC FIRST Bk mgmt remarks in concall on fraud at Chandigarh branch 
--IDFC FIRST Bank: Will spare no one involved in fraud at Chandigarh branch 
--IDFC FIRST Bank: Will look throughout bank to contain more such frauds 
--IDFC FIRST Bank: Haryana govt deposit around 0.5% of total deposits 
--IDFC FIRST Bank: Cheques used in Chandigarh branch fraud, not digital mode 
--IDFC FIRST Bank: Actual discrepancy in Chandigarh branch case INR 4.9 bln 
--IDFC FIRST Bk:Chandigarh branch fraud amount could change, may see recovery 
--IDFC FIRST Bank:Centre, state govt deposits around 8-10% of total deposits 
--IDFC FIRST Bank: Will be able to manage fraud case comfortably 
--IDFC FIRST Bank: No error in statement of account in Haryana govt account 
--IDFC FIRST Bank: Don't expect bank cost to rise from fraud incident 
--IDFC FIRST Bk: Expect deposits to continue growing despite fraud incident

By Shubham Rana and Simran Rede

 

MUMBAI/NEW DELHI – The INR-5.9-billion discrepancy involving an account of Haryana government--which likely stemmed from unauthorised and fraudulent activities carried out by certain employees at a Chandigarh branch--is unlikely to have a major impact on IDFC FIRST Bank's costs and deposits, the lender's management said Monday.

 

On Saturday, IDFC FIRST Bank informed exchanges that it had received a request from a Haryana government department for closure of its account and transfer of funds to another bank. In the process, the bank observed differences in the balances in the account and the balances mentioned by the Haryana government department in the Chandigarh branch. The discrepancy observed was of INR 4.9 billion and additional INR 1 billion was identified by the bank, taking the total discrepancy amount to INR 5.9 billion.

 

"These numbers could move from here. We could also get recoveries through these accounts. The legal process could itself establish and validate some of these claims. So we would give an update once this entire process is concluded," Sudhanshu Jain, chief financial officer, IDFC FIRST Bank, said in a conference call with analysts on Monday.

 

The management said it has suspended the employees suspected of fraudulent activities and so far it has not come across the involvement of senior management. At 1122 IST, shares of the bank were down nearly 16% at INR 70.29 on the National Stock Exchange. The stock had fallen to a low of INR 66.80 earlier in the day.

 

"This is basically a case where debit instructions have come supposedly from the client, which our people--which clearly, to us, indicate the fraudulent activity--have passed the entries and have transferred the money to certain parties outside the bank from the client's account," V. Vaidyanathan, managing director and chief executive officer of the bank, said. "So this looks to us, on the basis of the work we've done, clearly, a case of an employee fraud. And also our internal fingerprints and our details are quite clear that external parties are also involved here," Vaidyanathan said.

 

The fraud was committed through physical transactions involving cheques, Vaidyanathan said, adding that this "obviously happened" because of the connivance of employees. "The whole system exists but obviously, there is some bunch of people who have come together to make it happen," Vaidyanathan said.

 

The bank has acted decisively against the fraud and it will get to the bottom of the incident, the management said. "We will spare on one." IDFC FIRST Bank has appointed KPMG to initiate an independent forensic audit in this case. The management will also "scan every nook and corner" of the bank to look for more such cases to contain them, Vaidyanathan said.  

 

The Mumbai-based lender is trying to figure out "where the money has gone". The bank will try to block and recover the dues if the money has not left the system, Vaidyanathan said.

 

The bank does not see major financial implication from the incident and will be able to manage comfortably, the management said. Haryana government deposits make up around 0.5% of the bank's total deposits and the lender has seen outflows of around INR 2 billion over the last few days. "But we think since the overall number itself is small, it should be quite manageable," the management said.

 

IDFC FIRST Bank had deposits worth INR 2.83 trillion as of Dec. 31, up 24% on year. Of this, only 8-10?posits are from the central and state governments combined. Customers will look through this one incident at one branch and deposits will continue to grow, Vaidyanathan said.

 

The bank already has systems in place that are running well, Vaidyanathan said. "So we don't expect that because of this, we have to put so many new controls that will impact the cost of the bank or nothing like that. So I think we don't think so."

 

The bank also expects improvement in net interest margin during the March quarter from 5.76% in the December quarter. "And hence, whatever is the outcome of this exercise, we should be in a comfortable position to subsume that," the management said.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Ashish Shirke

 

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