IDFC First Bank fraud: ₹583 crore recovered, four arrested, forensic audit ordered

Nearly the entire ₹590-crore defrauded amount has been recovered , four people have been arrested, private banks have been de-empanelled from handling state funds , and a forensic audit has been ordered as Haryana intensifies action in the IDFC First Bank fraud case.

The State Vigilance and Anti-Corruption Bureau on Wednesday arrested four accused, including two former IDFC First Bank employees and two private individuals , who are partners in a firm allegedly used to route illegal transactions. Investigators said the fraud took place at the bank’s Chandigarh branch through forged cheques and unauthorised fund transfers from government-linked accounts. Over 390 suspicious transactions across more than 170 accounts are under scrutiny, while around ₹70 crore has been frozen.

The fraud came to light in January when several government departments sought to close their accounts and discovered major discrepancies between recorded balances and actual funds. Money parked under key welfare schemes, including the Mukhya Mantri Gramin Awas Yojana 2.0 , was among the amounts siphoned off.

Chief Minister Nayab Singh Saini informed the Assembly that ₹556 crore, including ₹22 crore in interest, was credited back to government accounts within 24 hours of detection. Separately, IDFC First Bank transferred ₹583 crore , covering the principal and interest, to the state government and assured full cooperation in the investigation.

Following the disclosure, the Haryana government de-empanelled IDFC First Bank and AU Small Finance Bank , ordered all departmental funds to be shifted to nationalised banks, and constituted a high-level committee led by the finance secretary to review banking protocols and strengthen safeguards.

The bank has suspended four employees, filed a police complaint, and engaged an external agency for a detailed forensic audit. The Reserve Bank of India said the incident poses no systemic risk to the banking sector, though criminal investigations and recovery efforts are underway .

Meanwhile, the Opposition has demanded a CBI probe , citing the scale of the alleged financial misconduct and the need for an independent inquiry.