IDFC FIRST Bank, usually known for its “customer-first” digital image, is currently facing a massive storm. A ₹590 crore fraud has been detected at its Chandigarh branch, leading to a sharp crash in its stock price and a major standoff with the Haryana government.
If you are a depositor or an investor, here is the breakdown of the situation in plain English.
How the Plot Unfolded
A department of the Haryana Government decided to close its account at the Chandigarh branch and move its funds. When the bank went to process the transfer, they realized the numbers didn’t add up. The money “on paper” was much higher than the actual cash left in the account.
By February 22, 2026, other state departments rushed to check their balances, only to find that their money had also been tampered with.
The “Inside Job”: What Went Wrong?
Preliminary reports suggest this wasn’t a remote hacking attempt by outsiders. Instead, it appears to be a classic “internal collusion” case. The bank has already suspended four officials from the Chandigarh branch. The fraud is reportedly limited to a specific group of Haryana State Government accounts.
At ₹590 crore, the stolen amount is larger than the bank’s entire profit for the last quarter (₹503 crore). This is a massive hit to the bank’s “bottom line.”
Market Chaos: Stocks Take a Beating
The stock market reacted with zero mercy. On Monday, February 23, 2026, IDFC FIRST Bank shares plummeted 20%, hitting the lower circuit. Investors are worried that if ₹590 crore could vanish from one branch, there might be deeper issues with how the bank monitors its employees.
In a move that hurts the bank’s reputation even more, the Haryana Government has decided to cut ties. The state has “de-empanelled” IDFC FIRST Bank. All government departments, boards, and universities have been told to withdraw their money immediately. The government has directed these departments to move their funds only to Public Sector Banks (Sarkari Banks) like SBI or PNB to ensure “safety over style.”
What is the Bank Doing Now?
CEO V. Vaidyanathan has stepped in to reassure the public, calling this a “one-off” incident in the bank’s decade-long history. To fix the mess, the bank has appointed KPMG to conduct a “forensic audit” (a deep-dive investigation) to track every single paisa. The bank also filed a formal police complaint to catch the culprits.
The Big Question: Is Your Money Safe?
The short answer: Yes.
The bank has clarified that this was an isolated incident involving specific government accounts at one branch. If you are a retail customer with a savings account, FD, or home loan, your money is not part of this “missing” ₹590 crore.
However, for the bank, the road to winning back “trust” will be much longer than the road to recovering the money.
