By Dalal Street Investment Journal (DSIJ)
IDFC FIRST Bank reported discrepancies in certain Haryana government–linked accounts operated via its Chandigarh branch, putting about ₹590 crore under reconciliation. Four officials have been suspended, a police complaint has been filed, and KPMG has been appointed for an independent forensic audit.
Indian equities opened higher on Monday, February 23, 2026, after a U.S. Supreme Court ruling struck down Donald Trump’s global tariffs, lifting early sentiment with the Nifty 50 and BSE Sensex up over 0.60% in early trade.
Yet, one stock moved sharply against the tape: IDFC FIRST Bank shares slid hard after the lender disclosed a suspected fraud of around ₹590 crore linked to a set of Haryana government–related accounts.
The chain of events began with a circular issued by the Government of Haryana on February 18, 2026, stating that IDFC First Bank and AU Small Finance Bank were de-empanelled for government business in the state “until further notice.” The circular also directed departments and organisations not to park or transact government funds through these banks and to initiate transfers/closures of existing balances and accounts.
De-empanelled means an institution has been officially removed from the approved list of entities authorised to conduct specific business in this case, the bank can no longer handle government transactions until further notice.
Following this, IDFC First Bank received a request from a Haryana government department to close an account and transfer funds to another bank. During this closure process, the bank noticed discrepancies between the amount mentioned in the request and the balance reflecting in the account. As other Haryana government entities approached the bank regarding their accounts, similar mismatches were observed between account balances on record and balances communicated by those entities.
Based on the bank’s preliminary internal review, the issue appears confined to a specific group of government-linked accounts in Haryana that were operated through a branch in Chandigarh. The bank indicated that the matter does not extend to other customers of that branch. The aggregate amount under reconciliation across the identified accounts is approximately ₹590 crore, with the eventual impact dependent on further information, validation of claims, and recoveries (including through lien marking and legal processes).
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The bank has outlined multiple steps, including:
Suspension of four suspected officials pending investigation
Escalation to board-level oversight committees, including the Special Committee for monitoring fraud cases, and briefings to the audit committee and board
Filing a police complaint and cooperating with investigating agencies
Informing statutory auditors
Sending recall requests to beneficiary banks to mark liens on balances in suspicious accounts
In a subsequent update, the bank said it has appointed KPMG to initiate an independent forensic audit into the matter, under applicable disclosure requirements.
As per the press release of the Bank, it said, “Pursuant to Regulation 30 of the SEBI Listing Regulations read with SEBI Master Circular dated January 30, 2026, and our previous disclosure dated February 21, 2026, wherein we had inter alia stated that the Bank is in the process of appointing an independent external agency to conduct a forensic audit. In furtherance of the same, we wish to inform you that the Bank has appointed KPMG to initiate an independent forensic audit in this matter.”
On Monday, February 23, 2026, IDFC First Bank’s share price was down a staggering 15%. Over 30 crore shares were traded on the NSE within the first hour of trade. This was the stock’s highest single-day volume since 2023.
SEBI Registered Research Analyst (INH000006396).
Founded in 1986, Dalal Street Investment Journal (DSIJ) brings decades of experience in India’s equity markets. DSIJ's research combines fundamental analysis with price action, guided by disciplined risk management and capital preservation. They follow a structured, data-driven approach designed to help investors and traders make informed decisions beyond short-term market noise.
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