IDFC First Bank flags Rs 590-crore fraud in Haryana govt-linked accounts at Chandigarh branch

IDFC First Bank

• IDFC First Bank reports Rs 590 crore fraud at Chandigarh branch
• Four employees suspended amid ongoing investigation
• Fraud limited to Haryana govt-linked accounts, says bank

Did our AI summary help?

IDFC First Bank reported unauthorized and fraudulent activities linked to Haryana government accounts worth Rs 590 crore at a branch in Chandigarh.

The lender, in a disclosure on February 22, said an investigation has been initiated and suspected employees have been placed under suspension. The bank has not identified the incident's exact time of occurrence, saying it is subject to investigation.

"...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 individuals / entities/ counterparties," the bank statement said.

The lender said the aggregate amount across the identified accounts so far stands at Rs 590 crore and the impact of incident will be determined after receiving further information and validation of claims.

In addition, the fraudulent incident is so far limited to a specific group of government-linked accounts within Haryana government, operated through the branch in Chandigarh, the bank said citing preliminary probe. It bank pointed out that the matter, as of now, does not extend to other account holders at the Chandigarh branch.

The incident came to light after the lender received a request from a particular Haryana government department for closure of its account and transfer of funds to another bank. "In the process, certain discrepancy were observed in the amount mentioned vis-a-vis the balance in the account.

Moreover, few other departments engaged with the bank for their respective accounts, during which several "differences were observed" in the balance records of the bank and the state government.

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

The bank said it has placed the matter before the Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds (SCBMF) and is in the process of appointing an independent external agency to conduct an independent forensic audit.

The stock of the company closed 0.72 percent higher at Rs 83.56 on BSE during the last trading session on February 20.