The banking sector reeled from a Rs 590 crore fraud bombshell at IDFC First Bank’s Chandigarh outpost, propelling shares into a 20% freefall and lower circuit on Monday. Linked to Haryana government accounts and staff malfeasance, the episode has prompted blacklisting and suspensions.
Shares gapped down 10% to Rs 75.16 at open from Rs 83.51, plunged to Rs 66.80, then recovered marginally to Rs 70.39—a 15.71% decline by mid-morning.
Bank disclosures pinpointed unauthorized activities by branch employees, possibly with external aid, confined to select state accounts. Four executives face suspension, with FIRs filed and regulators looped in.
Impact assessments from brokerages reveal the scam as 0.9% of assets and a hefty 20% slice of FY26 pre-tax profits, underscoring the scale of betrayal.
Haryana’s finance mandarins struck back with a blanket ban on IDFC First and AU Small Finance Bank for state transactions. Directives demand cessation of all dealings, fund repatriation, and account terminations across the board.
Non-compliance in fixed deposits—funds shunted to low-yield savings—was blamed for fiscal shortfalls. Departments must now enforce terms rigorously, secure bank attestations, conduct monthly audits, and flag issues, culminating in reconciliations by March 31, 2026, and reports by April 4.
Beyond immediate market turbulence, this fraud exposes chinks in oversight armor, urging systemic fortification against insider threats in government-bank interfaces.