IDFC FIRST Bank is under intense scrutiny over a massive ₹590 crore fraud at its Chandigarh branch involving Haryana government accounts, yet the bank insists it has already reimbursed the affected departments 100% of their dues. The scandal erupted recently, prompting arrests and a high-level probe, but the lender's quick payout has somewhat eased immediate tensions.

The fraud came to light when a Haryana government department attempted to close its account and transfer funds, only to discover huge discrepancies in the balances. Reports indicate rogue bank employees at the Chandigarh branch allegedly executed unauthorized transactions, using forged documents to siphon money from over 170 linked accounts. Investigators suspect collusion with outsiders, including links to firms owned by siblings and even some IAS officers, with transaction trails leading to other banks like AU Small Finance Bank.

In a bold move amid the ongoing investigation by Haryana's Anti-Corruption Bureau (ACB), IDFC FIRST Bank transferred a net ₹583 crore—covering principal plus interest—to the impacted departments within days. The bank publicized this in newspaper advertisements and stock exchange filings, earning public thanks from the departments for its "prompt and principled" response. They've suspended implicated staff, launched a forensic audit, frozen suspect accounts, and are pursuing legal recoveries, with nearly ₹556 crore already clawed back in the first 24 hours.

Haryana Police have nabbed four individuals, including alleged mastermind Ribhav Rishi, in connection with the embezzlement. A special committee appointed by the Chief Minister is now probing deeper to fix accountability across the board. The case highlights vulnerabilities in handling public funds, echoing larger banking scandals like the past PNB fraud.

The revelation triggered a sharp sell-off, with IDFC FIRST shares plunging up to 20% and wiping out over ₹14,000 crore in market cap—far exceeding its latest quarterly earnings. Analysts estimate a 22% hit to FY26 profits, though the net worth impact is limited to 1%. Shares have shown early signs of rebound, closing up 1.33% at ₹70.97 on Tuesday. This episode tests IDFC FIRST Bank's reputation as a fast-growing digital player. While the full audit could bring more revelations, the bank's decisive repayment sets a strong precedent for accountability in India's banking sector. Stay tuned for updates as the investigation unfolds.