IDFC First Bank Uncovers Rs 590 Crore Discrepancy in Haryana Government Deposits
IDFC First Bank Ltd has reported a significant financial irregularity involving deposits held on behalf of the Haryana Government at its Chandigarh branch. The bank disclosed a discrepancy amounting to approximately Rs 590 crore, leading to immediate internal actions and regulatory notifications.
Immediate Actions and Investigation
Upon identifying the issue, IDFC First Bank took swift measures to address the situation. The bank has suspended four employees who are suspected of involvement in the matter, pending a thorough investigation. Additionally, the lender has filed a formal police complaint and informed relevant financial regulators to ensure transparency and compliance.
The bank's board was alerted through a hastily convened meeting on February 21, following the initial discovery. This escalation underscores the seriousness with which the institution is treating the incident, aiming to mitigate any potential fallout and restore trust.
Forensic Audit and Regulatory Compliance
To ensure a comprehensive examination of the discrepancy, IDFC First Bank has initiated the process of appointing an independent external agency to conduct a forensic audit. The bank has also informed its statutory auditors and submitted recall requests to certain beneficiary banks to lien-mark balances in accounts suspected of involvement.
The disclosure was made to the stock exchanges under Regulation 30 of the SEBI Listing Regulations, highlighting the bank's commitment to regulatory adherence. This information has been publicly uploaded on the bank's website, providing stakeholders with access to the latest updates.
Scope and Impact Assessment
Based on a preliminary internal assessment, the bank has clarified that the issue is confined to a specific group of accounts linked to the Haryana Government, operated through the Chandigarh branch. It does not extend to other customers at the branch, suggesting a targeted incident rather than a widespread problem.
The aggregate amount under reconciliation across the identified accounts is about Rs 590 crore. However, the eventual financial impact remains uncertain and will depend on several factors, including:
- Validation of claims related to the discrepancy.
- Recoveries from lien-marked balances in beneficiary accounts with other banks.
- Liabilities of other entities involved in the transactions.
- The outcome of legal recovery proceedings initiated by the bank.
Haryana Government's Response
In response to suspected financial irregularities, the Haryana Government has taken decisive action. Effective February 18, 2026, the state has directed the closure of all its accounts with specific private banks, primarily IDFC First Bank and AU Small Finance Bank. This move de-empanels these banks from government business, reflecting heightened scrutiny over financial practices.
Departments, boards, corporations, and universities under the Haryana Government have been instructed to withdraw funds and shift exclusively to nationalised banks. Any future accounts with private banks will require prior approval from the finance department, emphasizing a shift towards stricter financial controls.
The government's decision aims to enforce compliance with fund-parking guidelines and ensure monthly reconciliations, thereby safeguarding public money and preventing similar incidents in the future. This regulatory tightening comes amid broader concerns over financial management and transparency in government dealings with private lenders.
As the investigation progresses, stakeholders will be closely monitoring developments, with the bank's actions and the government's policies likely to influence broader banking and regulatory landscapes in India.
