A case of suspected financial irregularity of approximately ₹590 crore has come to light at a branch of IDFC First Bank located in Chandigarh. The bank informed the stock exchange on February 21 that the role of four employees of the branch has been found suspicious in this matter.
According to media reports, the bank’s preliminary internal investigation revealed suspicious activities by some employees, indicating potential fraud. The bank has also clarified that a detailed investigation into the matter is ongoing to determine if other individuals or entities were involved in this alleged irregularity.
How was the scam uncovered?
According to the bank, the matter came to light when a department of the Haryana government requested to close its account and transfer the deposited amount to another bank. During the account closure process, a discrepancy was found between the balance recorded in bank records and the remaining funds stated by the department.
Following this discrepancy, other entities associated with the Haryana government also contacted the bank regarding their accounts starting February 18. As the investigation progressed, similar discrepancies were found in these accounts as well.
The bank has clarified that the matter is limited to a specific group of accounts linked to the Haryana government operated in the Chandigarh branch. It has no impact on the accounts or deposits of other customers of the branch.
How much amount is suspicious?
During the account reconciliation process, an amount of approximately ₹590 crore has been found suspicious. However, it has not been clarified during which period the alleged irregularity occurred. The bank states that the entire matter will be investigated by an independent external agency, only after which the exact timeline and nature of the discrepancy can be determined.
Who is under suspicion?
According to the information provided to the stock exchange, the preliminary investigation has raised suspicion on those employees posted in the Chandigarh branch who were handling the operations of accounts linked to the Haryana state government.
The bank has also acknowledged that the potential role of external individuals or any counterparties in the matter is being investigated and this aspect cannot be entirely ruled out. The bank states that the actual financial impact will be assessed only after the completion of a detailed investigation, verification of claims, and the process of potential recovery.
What action has the bank taken so far?
Following the emergence of the case, the bank has taken several steps at regulatory and legal levels. Formal notification has been given to the concerned regulatory authority. Additionally, a complaint has been lodged with the police, and the matter is also being handed over to other law enforcement agencies.
The bank has assured full cooperation to the investigating agencies. Furthermore, the process of appointing an independent external agency to conduct a thorough investigation into the entire incident, including a forensic audit, has been initiated. Statutory auditors have also been informed about this matter to ensure that further investigation proceeds transparently.
Internal Action
Based on the preliminary investigation, the bank has suspended four suspicious officials until the completion of the investigation. The management has clarified that if the allegations are proven in the investigation, strict disciplinary, civil, and criminal action will be taken against the concerned employees and other potentially involved individuals.
On February 20, a meeting of the Board’s special committee constituted for monitoring fraud cases was convened, where the entire incident was reviewed. Subsequently, detailed information about the matter was also shared in the meetings of the Audit Committee and the Board of Directors on February 21.
Additionally, the bank has sent recall requests to some beneficiary banks, urging them to mark a lien on the available funds in the suspicious accounts to limit potential losses.
