IDFC First Bank reports ₹590cr fraud involving Haryana government accounts
What's the story
IDFC First Bank has reported a major fraud worth ₹590 crore, involving its employees and other parties. The fraudulent activities were detected in accounts held by the Haryana government with the bank at its Chandigarh branch. The lender has already informed the banking regulator and lodged a police complaint over the matter.
Investigation details
Fraud detected during account closure request
The bank's filing said, "Prima facie, unauthorized and fraudulent activities have been carried out by certain employees at a particular branch in Chandigarh in a specific set of Haryana state government accounts and potentially involving other individuals/entities/counterparties." The fraud was uncovered after a request for account closure and balance transfer to another bank. Discrepancies were found between the requested amount and the actual balance.
Broader impact
Fraud extends to multiple government accounts
The fraudulent activities aren't limited to one account but extend to other Haryana government accounts. The Haryana government issued a directive on February 18 to close accounts with certain private banks, which is when discrepancies were noted. The bank has said that a preliminary internal review shows the issue is confined to a specific group of government-linked accounts within the Haryana government, and doesn't extend to other customers of the Chandigarh branch.
Disciplinary measures
Bank takes action against officials, initiates forensic audit
The bank has suspended four of its officials pending an investigation into the matter. It has also sent "recall request" to certain beneficiary banks to "lien mark balance" in suspicious accounts held in these banks. The statutory auditors have been informed about the incident and an independent forensic audit will be conducted by appointing an external agency.