All About The IDFC First Bank’s ₹590 Crore Fraud Case

A fraud case linked to IDFC First Bank’s Chandigarh branch has triggered arrests and a forensic probe. The discovery also jolted the markets. In a single trading session, the bank lost more than ₹14,000 crore in investor wealth as the stock plunged.

The case revolves around unauthorised transactions linked to accounts associated with Haryana government entities. What initially appeared to be an accounting mismatch has now evolved into a wider probe involving former bank officials, private firms, and government personnel.

How The Fraud Was Found Out

The issue came to light during an account transfer. A department of the Haryana government had instructed the bank to shut its account and move the funds to another bank.

Immediate concerns were raised as the request was being processed, and a discrepancy surfaced. The balance stated by the government department differed from what appeared in the bank’s records.

A deeper review showed that there were several transactions that had not been authorised. These were traced to accounts being operated from the Sector-32 branch located in Chandigarh.

A regulatory filing from the bank revealed a mismatch totalling about ₹590 crore across the accounts that were flagged. The institution noted that the problem was limited to a particular set of government-linked accounts managed at that branch. Other customers there were unaffected.

After identifying the discrepancy, the bank informed regulators, alerted its statutory auditors, and filed a police complaint. Four officials were suspended pending investigation.

Arrests And The Alleged Money Trail

The Haryana State Vigilance and Anti-Corruption Bureau soon widened the investigation. Authorities arrested four people, including two former employees of the bank.

The accused include Ribhav Rishi, who previously headed the Chandigarh branch, and Abhay Kumar, a former relationship manager who investigators believe orchestrated the scheme.

Two private individuals, Swati Singla and her brother Abhishek Singla, who run a partnership firm called Swastik Desh Projects, were also arrested. Swati Singla holds a majority stake in the business and is also the spouse of Abhay Kumar.

Investigators say nearly ₹300 crore from the fraudulent transactions was routed to the firm’s account. The probe later expanded further with the arrest of Naresh Bhuwani, a superintendent in the Haryana Development and Panchayat Department. Authorities suspect he acted as a middleman connecting government officials with the accused bankers.

Investigators allege Bhuwani received around ₹1.25 crore from the firm’s account within a short period. Some of the money was reportedly transferred to family members, while a portion was allegedly used to purchase a vehicle.

Officials say further interrogation is required to trace the complete money trail and identify any additional beneficiaries.

Bank Response And Recovery Measures

IDFC First Bank has maintained that the lapse was limited to one branch and involved collusion between a few individuals rather than a system-wide failure.

The bank’s board-level Special Committee for Monitoring Fraud Cases met on 20 February 2026, followed by meetings of the audit committee and the full board the next day.

To establish the exact sequence of events, the lender appointed KPMG to conduct an independent forensic audit. Operational measures were also initiated. The bank issued recall requests to beneficiary banks and asked them to mark liens on suspicious accounts in order to prevent further movement of funds.

Meanwhile, the lender reimbursed the affected government departments. During reconciliation, total payouts reached ₹645 crore, higher than the original estimate due to additional claims connected to the same incident.

The bank stated that no further discrepancies have been detected and that there are currently no pending claims related to the case.

Market Reaction And Government Action

The disclosure triggered a swift reaction in financial markets. IDFC First Bank shares plunged nearly 20%, hitting the lower circuit and erasing over ₹14,000 crore in market capitalisation in a single session. The scale of the fraud shocked investors, particularly because the amount involved exceeded the bank’s quarterly net profit.

The Haryana government also responded quickly. The state removed IDFC First Bank from its empanelled list and directed departments to close accounts held with the lender.

A high-level committee comprising senior administrative officials has been formed to examine the matter and determine whether any government personnel were involved.

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Investor Takeaway

Although the incident created immediate concern, a significant portion of the funds has already been retrieved, and the bank’s liquidity does not currently show signs of strain.

The damage to its reputation, however, may not fade as quickly. Trust in financial institutions tends to rebuild slowly. For investors watching the situation, the next important signals will come from the forensic audit and the conclusions reached by investigators.

Sources:

Economic Times

The Hindu

The Times of India