IDFC FIRST Bank detects Rs 590 crore fraud in Haryana government accounts, four employees suspended

The bank has launched an investigation, and plans to recover the funds through legal and disciplinary action.

"Based on the preliminary internal review conducted, the matter is confined to a specific group of government-linked accounts within Haryana Government operated through the said branch in Chandigarh and does not extend to other customers of the Chandigarh Branch. The aggregate amount under reconciliation across the identified accounts at the abovementioned Branch is approximately 590 crore. The impact may be determined based on receipt of further information, validation of claims, recoveries of any nature including those made through the process of marking lien on fraudulent beneficiary accounts maintained with other Banks, liabilities of other entities involved in the fraudulent transactions, and the legal recovery process," IDFC FIRST Bank said in its filing.

"The Bank has taken the following actions: Four suspected officials have been placed under suspension pending investigation. The Bank will pursue strict disciplinary, civil and criminal action against the employees and other external individuals responsible, in accordance with applicable law," the filing added.

Meanwhile, the Finance Department (Institutional Finance & Credit Control) of Haryana has de-empanelled IDFC First Bank and AU Small Finance Bank for government operations with immediate effect. The department has instructed all government departments, boards, corporations, and public sector undertakings to transfer funds from these banks to other authorised banks and close the accounts immediately, pending further notice.

"The Finance Department (Institutional Finance & Credit Control) of the Government of Haryana has de-empanelled IDFC First Bank and AU Small Finance Bank for government operations in the state with immediate effect. According to the issued order, no government funds shall be deposited, invested, or transacted through these banks until further notice. The Finance Department has directed all departments, boards, corporations, and public sector undertakings to immediately transfer the balances in accounts maintained with these banks to other authorised banks and close the respective accounts," an official press release from the department said.

Reacting to the news, Congress leader Rao Narendra Singh expressed serious concern, stating that the alleged fraud is not just a financial irregularity but a direct assault on public trust. He questioned how such a large sum could be misappropriated without gross negligence or collusion at higher levels, and whether government financial controls had been reduced to mere formalities.

He emphasised that suspending four officials is insufficient and called for a fair, time-bound, and impartial investigation, with public identification of the responsible parties and the harshest possible action, stressing that this is public money, not a private treasury.

"The revelation by IDFC FIRST Bank of an alleged fraud of approximately Rs 590 crore in accounts linked to the Haryana Government is extremely serious and deeply concerning. This is not merely a financial irregularity, but a direct assault on public trust. Even if the case is being described as limited to the Chandigarh branch, the question still arises: how could such a massive amount of money be siphoned off without gross negligence or collusion at the highest levels? Were the internal audit, monitoring mechanisms, and government financial controls reduced to mere paper formalities?," Rao Narendra Singh wrote on 'X'.

"The suspension of four officials is not enough. What is required is a fair, time-bound, and impartial investigation of the entire matter, public identification of those responsible, and the harshest possible action against the guilty. This is the people's money, not some private treasury. Accountability must be fixed," the 'X' post added. (ANI)