‘No systemic risk’: Sanjay Malhotra breaks silence on ₹590 crore IDFC First Bank Limited fraud

Malhotra declined to comment on the bank’s internal investigation.

“As a policy, we do not comment on any individual bank or regulated entity. We are watching the developments. There’s no systemic risk here,” he said, as quoted by CNBC-TV18.

In an exchange filing, IDFC First Bank said that a few employees were involved in unauthorised transactions from accounts linked to the Government of Haryana.

The fraud came to light after the Haryana government requested the closure of its account and transfer of funds to another bank. During the reconciliation process, the lender detected discrepancies between the balances recorded in its books and those reported by the government, The Times of India reported.

“The aggregate amount under reconciliation across the identified accounts at the above-mentioned branch is approximately ₹590 crore,” the bank said in its filing, as quoted by The Hindu.

The bank added that the final financial impact will depend on further information, validation of claims, recoveries, and the outcome of legal proceedings and forensic examination.

Four officials suspected of involvement in the fraud have been suspended, and an internal investigation is underway. The bank is also in the process of appointing an independent agency to conduct a forensic audit.

IDFC First Bank clarified that the fraudulent activity was limited to a specific set of government-linked accounts at its Chandigarh branch and that other customer accounts at the branch remain unaffected.

The fraud has surfaced amid an ongoing probe into alleged loan irregularities worth over ₹1,000 crore at the bank.