IDFC First Bank ₹590 Crore Fraud Exposed; Haryana Govt Pulls Funds | IDFC First Bank Share

Shockwaves hit the banking sector after a ₹590 crore fraud surfaced at IDFC First Bank involving Haryana government accounts at its Chandigarh branch. The discrepancy was uncovered during a routine account closure request when state departments began shifting funds to public sector banks following a government directive. A preliminary probe suggests the issue was restricted to one branch, with four employees suspended and an independent audit ordered. The Haryana government has since de-empaneled the lender and ordered immediate withdrawal of all state funds. The bank has told investors that the affected deposits account for roughly 0.5% of total deposits and assured that the impact is manageable, though the ₹590 crore exposure exceeds its recent quarterly profit, raising concerns about provisioning in Q4. Meanwhile, AU Small Finance Bank, which was also empaneled for state deposits, clarified that its exposure is not significant. While management maintains that the fraud was cheque-based and not a digital systems failure, markets remain watchful as trust and governance questions come to the forefront.