IDFC Bank Discloses Rs 590 Cr Fraud In Haryana Government A/cs

In a statement to the Bombay Stock Exchange, IDFC Bank said, "Prima facie, unauthorised 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 Bank has suspended four of its branch employees.

At present, it estimated the fraud size at Rs 590 crore and added that a "reconciliation exercise" would determine the final amount based on receipt of further information, validation of claims, and recoveries of any nature.

Providing details of the fraud, it said a Haryana Government department had been banking with IDFC First Bank, and the lender received a request for a closure and balance transfer to another bank on an undisclosed date.

However, the amount mentioned by the government department did not match the balance in the account. It said that similar issues were observed in other accounts of Haryana Government entities, who engaged with the bank from February 18 onwards.

The bank said that it was in the process of appointing an independent external agency to conduct a forensic audit. The regulator and the statutory auditors have been informed about the fraud, it said. “The Bank has sent a recall request to certain beneficiary banks to lien mark balance in suspicious accounts held in these banks,” the lender told the exchange.

Meanwhile, the Haryana state government has de-empanelled IDFC First Bank and AU Small Finance Bank for government business in the state.

“No government funds shall henceforth be parked, deposited, invested or transacted through these banks,” the government notification issued on February 18 had said.

The new norms permit administrative secretaries to approve the opening of accounts for government schemes only in nationalised banks operating in the state, while opening accounts in private sector banks would require prior approval.