IDFC First Bank: IDFC First Bank customers are worried about the fraud! Are your savings at risk?
Private lender IDFC First Bank has announced that some employees at its Chandigarh branch made unauthorized transactions in accounts belonging to the Haryana state government, resulting in a deposit balance difference of approximately ₹590 crore. When such a situation occurs, many customers at that branch become wary of what will happen to their deposits. Can they withdraw their funds? If so, how much? Let's explore the IDFC First Bank case, whether the lender has made any comments about account holders' deposits, the Reserve Bank of India's (RBI) stance on the matter, and what consumer rights they have regarding their bank deposits.
What is the IDFC First Bank case?
IDFC First Bank stated in its filing to the BSE that, based on an initial internal assessment (following communication from a specific Haryana government department), the bank had identified an incident involving unauthorized and fraudulent activities by certain employees at a specific branch in Chandigarh. The bank stated that other individuals/entities/counterparties may also be involved in this incident.
The bank received a request from a specific Haryana government department to close its account and transfer funds to another bank. During this process, some discrepancies were observed between the stated amount and the account balance.
Since February 18, 2026, some other entities of the Haryana government contacted the bank regarding their accounts. During this process, discrepancies were observed between the account balances and the balances reported by the Haryana government entities holding accounts with the bank.
According to IDFC First, a fraud involving ₹590 crore involving Haryana government accounts was perpetrated through collusion between bank employees and outside parties. The issue was limited to a single unit and a single customer group and did not extend to other customers of the Chandigarh branch. This is not a case of a systemic reporting error.
The Haryana government has de-empanelled IDFC First Bank and AU Small Finance Bank for government business with immediate effect until further orders. PTI reported that no government funds will be parked, deposited, invested, or transacted through these institutions.
How much money is being reconciled in the IDFC First Bank case?
A total of approximately ₹590 crore is being reconciled across the accounts identified at the Chandigarh bank branch. IDFC First Bank stated that it has initiated an investigation and plans to recover the money through legal and disciplinary action.
What did the RBI say on the IDFC First Bank case?
In a joint press conference with Finance Minister Nirmala Sitharaman, RBI Governor Sanjay Malhotra stated regarding the IDFC First Bank issue that they are monitoring developments and there is no system-related issue.
What could happen to IDFC First customers' deposits?
Although IDFC First Bank has not yet disclosed what will happen to its branch customers' deposits, as per general guidelines, all bank deposits are covered under the Deposit Insurance and Credit Guarantee Corporation of India (DICGC) insurance scheme, subject to certain limits and conditions. Under the DICGC scheme, it covers a maximum of ₹5 lakh (including principal and interest) per depositor per bank in the event of bank failure, liquidation, or merger. Fixed deposits (FDs), savings accounts, recurring deposits (RDs), and current accounts are all covered under insurance.
Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
