Private sector lender IDFC First Bank recently confirmed that it has paid ₹645 crore to settle claims linked to a major fraud uncovered at its Chandigarh branch. The payout is ₹55 crore higher than the initial estimate of ₹590 crore, reflecting additional claims tied to the same incident. After completing a detailed reconciliation of accounts, the bank stated that no further discrepancies or claims have been identified. While the incident triggered concerns in the banking sector earlier this year, the bank has assured customers and investors that deposits remain stable and that it will pursue legal action against those responsible for the fraud.
Author : Aashiya Jain | EQmint | Market News
About IDFC First Bank
IDFC First Bank is one of India’s prominent private banks, offering a wide range of financial services including retail banking, corporate banking, wealth management, and digital banking solutions. The bank was formed after the merger of IDFC Bank and Capital First in 2018, and since then it has focused strongly on expanding its retail lending portfolio and digital banking capabilities.
Headquartered in Mumbai, the bank has grown steadily over the years, building a customer base across the country with products ranging from savings accounts and credit cards to personal and business loans. Despite its rapid growth, the bank like many large financial institutions must maintain strong internal controls to prevent operational risks and financial irregularities.
The Fraud That Triggered Concern
The controversy started earlier in February 2026 when the bank said there was a suspected fraud of around ₹590 crore at one of its branches in Chandigarh. The irregularities were found in accounts linked to certain Haryana government departments and entities.
Investigations suggested that some bank employees might have worked with outside people to make unauthorized transactions from these government-linked accounts. These transactions reportedly involved forged cheques and irregular debit instructions.
The issue came up when a government department asked to close its account and move the funds to another bank. During the reconciliation process officials noticed the balance didn’t match what was expected and that’s when they started looking deeper.
Once the irregularities were spotted the bank quickly told regulators and law enforcement agencies and also started its own internal investigation.
₹645 Crore Paid to Settle Claims
IDFC First Bank just confirmed in a regulatory filing that they paid ₹645 crore to settle all the fraud claims. That’s ₹55 crore more than the ₹590 crore they first estimated. Turns out more claims came up during the reconciliation process.
But the bank made it clear these were all from the same incident not a new fraud case. They also said they’ve finished reconciling everything and found no more discrepancies. So no pending claims are left from the Chandigarh branch mess.
By paying the affected parties the bank basically closed the financial side of things. Still the investigations and legal action against the people involved are going on.
Deposits Remain Stable
One of the biggest concerns in such situations is the potential loss of customer confidence. However, IDFC First Bank has reassured stakeholders that the fraud incident has not significantly impacted its financial stability.
According to the bank, total deposits stood at ₹2,92,381 crore as of February 28, 2026, compared with ₹2,91,133 crore at the end of December 2025, indicating steady growth despite the controversy.
The bank also reported that its liquidity position remains comfortable, highlighting that customer trust and operational stability have largely been maintained.
Legal Action and Recovery Efforts
The bank already paid the claimants but it’s still working with authorities to track down and recover the stolen money from whoever’s responsible. Several people got arrested including former bank employees and suspected collaborators as part of the ongoing investigation.
Authorities think the funds got moved through shell companies and other entities before being withdrawn or invested elsewhere. The bank says it’ll keep pursuing legal action to recover losses and strengthen its internal controls to prevent this kind of thing from happening again.
Lessons for the Banking Sector
Financial fraud cases often serve as a reminder of the importance of strong internal controls, transparency, and regulatory oversight in the banking system.
Even though the Chandigarh fraud was reportedly limited to a single branch and specific accounts, it sparked wider discussions about risk management in banks handling government funds.
For IDFC First Bank, the swift reimbursement of claimants and the completion of account reconciliation appear to be part of an effort to restore confidence among customers, regulators, and investors.
Looking Ahead
The incident initially raised concerns in the financial market but the bank’s decision to fully settle claims and provide clear updates has helped bring some closure to the issue.
As investigations continue and legal proceedings unfold the focus for IDFC First Bank will likely remain on strengthening governance practices and maintaining the trust of its customers.
For India’s banking sector the episode stands as an important reminder that transparency accountability and strong oversight remain essential pillars of financial stability.
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Disclaimer: This article is not an investment advice and is for educational purpose only
