The IDFC First Bank share price is in the spotlight today, February 23, after the bank disclosed a suspected fraud of around Rs 590 crore at one of its branches in Chandigarh. The share price plunged 10% in opening trade.
The development, which was informed to the stock exchanges on Sunday (February 22), has raised concerns because the amount involved is significant when compared to the bank’s recent quarterly earnings.
The issue came to light when the bank received a request from a department of the Haryana Government. This was related to close its account and transfer funds to another bank.
The private lender observed an inconsistency during the transfer process. This was between the account balance recorded in its system and the amount stated by the government department.
Furthermore, a deeper internal review revealed differences across certain accounts operated through the Chandigarh branch.
V. Vaidyanathan, CEO of IDFC Bank said, “We will get to the bottom of this and spare no one found responsible. KPMG has been appointed to conduct a forensic audit. The bank is in a fundamentally strong position — it is well capitalised, profitability is on a positive trajectory, and our operating profit has crossed 2%. We held discussions with employees last evening and everyone is holding the fort well. The Haryana Government account constitutes just 0.5% of our total deposits.”
Let’s take a look at the key factors investors need to know –
What exactly has happened?
According to the bank, fraudulent activities by certain employees were detected during a preliminary internal assessment. Four officials suspected to be involved have been suspended pending investigation. The bank has stated that it will pursue strict disciplinary, civil and criminal action against the employees and any external individuals found responsible.
In its regulatory filing, the bank said, “The aggregate amount under reconciliation across the identified accounts at the abovementioned Branch is approximately Rs 590 crore. The impact may be determined based on receipt of further information, 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.”
Why the amount matters
The Rs 590 crore figure is notable because it is higher than the bank’s reported net profit of Rs 503 crore in the December quarter. While the bank has clarified that the matter relates to specific accounts and does not impact other customers.
The lender has also sent recall requests to certain beneficiary banks to lien-mark balances in suspicious accounts.
Forensic audit and board oversight
The matter has already been placed before the bank’s Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds (SCBMF), which met on February 20, 2026. The bank initially said it would appoint an independent external agency for a forensic audit and later confirmed that KPMG has been appointed to conduct the review.
In addition, the bank has filed a complaint with the police and said it will fully cooperate with investigating authorities. A conference call has also been scheduled for Monday at 8 AM to provide further clarity to investors and analysts.
What investors should watch out for
With the disclosure now public, the immediate focus will be on the bank’s share price reaction and management commentary. Investors will look for clarity on potential financial impact, recovery timelines and whether any additional internal control weaknesses are identified.