The Haryana State Vigilance and Anti-Corruption Bureau has made significant progress in the IDFC First Bank fraud case, with 11 accused arrested so far, including 6 bank employees, 4 private individuals, and 1 government official. According to The Economic Times, 10 of these accused are currently in judicial custody while 1 remains on police remand. The investigation team has conducted 16 raids leading to the recovery of crucial documents related to property purchase and seized more than 25 electronic devices including mobile phones and laptops for examination at the cyber forensic laboratory. Additionally, authorities have seized 6 luxury vehicles, including 3 Toyota Fortuners, 2 Innovas, and 1 Mercedes, suspected to have been purchased using illicit proceeds. The probe has also identified 10 properties suspected to have been purchased using proceeds of crime, with investigators finding that the accused allegedly manipulated banking records by preparing fake debit memos or transferring funds without valid authorization.
The Enforcement Directorate conducted searches at 19 locations on March 12 in connection with the alleged embezzlement of ₹597 crore from Haryana government accounts maintained with IDFC First Bank in Chandigarh. According to The Hindu BusinessLine, the action was part of raids conducted across Chandigarh, Punjab's Mohali, Haryana's Panchkula and Gurgaon, and Karnataka capital Bengaluru. The ED froze 90 bank accounts and incriminating material during these searches, covering former bank employees, their family members, beneficiary shell entities, jewellers, and real estate developers. The funds were supposed to be deposited by various government departments of the state in the bank but instead of being deposited in fixed deposits, these were allegedly diverted by the various accused persons for their personal purpose. The ED investigation revealed that huge funds have been transferred to various shell companies and minor jewellery entities routed through various shell companies and layered through huge transactions, finally siphoned off under the guise of gold purchase and investment into real estate sector.
IDFC First Bank has completed the reconciliation of all relevant accounts at its Chandigarh branch and confirmed there are no further discrepancies, bringing partial closure to a fraud incident that rattled investors and markets in late February. According to reports from CNBC TV18, ET Now, The Times of India, and The Hindu BusinessLine, the bank disclosed that it has paid a net principal amount of ₹645 crore to claimants, which is ₹55 crore more than its initial estimate of ₹590 crore. The incremental payout is linked to additional claims received against the same incident and same branch, and is not connected to any new incident. In a regulatory filing to stock exchanges, the bank confirmed that there are no other pending claims, adding that no fresh claims have been received from any entity across the country since February 25, 2026. The bank clarified that all the claims relate to the same incident linked to the Chandigarh branch and do not represent a new case.
IDFC First Bank has implemented comprehensive security controls following the fraud incident, as reported by The Economic Times. The bank now requires account holders to authorise cheque transactions through the bank's mobile application after logging in before the cheque is cleared. For government, banking and institutional accounts, the bank has introduced two new controls: first sending an email to the registered email ID of the concerned account holder and clearing the transaction only after receiving explicit confirmation from that address. Additionally, the bank is taking measures to prevent collusion between the maker, checker, and branch manager of a single branch, along with external parties who somehow gained access to a debit instruction or cheque. "To mitigate the risk of incidents of this nature, the Bank is establishing a centralised authorisation team that will independently authorise transactions, separate from the branch," the bank spokesperson told The Economic Times. "This additional layer of oversight-combining branch-level checks with centralised authorisation-will help safeguard against the risk of collusion among branch staff."
The bank confirmed that its total deposit balance has remained stable at ₹2,92,381 crore as of February 28, 2026, compared to ₹2,91,133 crore as of December 31, 2025. As reported by CNBC TV18, the average Liquidity Coverage Ratio (LCR) for the ongoing quarter through February 28, 2026 stood at 114%, which the bank described as comfortable. It said it anticipates growth in deposits and loans broadly in line with past trends. The bank noted that it has made the payments to the concerned clients in line with its approach of compensating customers and will continue to pursue action against the perpetrators to recover the dues.
IDFC First Bank first disclosed the suspected fraud on February 22, 2026, after a preliminary internal assessment identified unauthorised and fraudulent activities carried out by certain employees at its Chandigarh branch, potentially in collusion with external individuals or entities. According to The Hindu BusinessLine, ET Now, and The Times of India, investigators identified 391 suspect transactions across approximately 170 accounts, totalling ₹597 crore. The investigation has revealed the involvement of 12 bank accounts linked to 8 government departments, with 10 maintained at the IDFC First Bank's branch in Sector 32, Chandigarh, and 2 at the AU Small Finance Bank. The matter was confined to a specific group of government-linked accounts within Haryana government operated through the said branch in Chandigarh and does not extend to other customers of the Chandigarh branch. The investigation team has obtained a large volume of records from banks and concerned departments, which are being analysed to identify both authorised and unauthorised transactions and trace the complete fund flow.
Shares of IDFC First Bank were trading at ₹64.78 on March 12, up 28.3% over the previous close on BSE, as reported by The Economic Times. The bank said it will continue to pursue legal action against those responsible to recover its dues, as reported by The Hindu BusinessLine. It stated that there are no other pending claims, adding that no fresh claims have been received from any entity across the country since February 25, 2026. The bank appointed KPMG to conduct a forensic audit covering transaction reconstruction, employee involvement, beneficiary account analysis, and systemic gaps. This comprehensive audit will help identify the root causes of the fraud and ensure proper internal controls are implemented to prevent similar incidents in the future. Officials from the Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs are assisting the bank by facilitating a formal complaint through the National Cybercrime Reporting Portal, identifying suspected beneficiaries and initiating lien marking on accounts.
