Private lender IDFC First Bank has said that some employees of its Chandigarh branch made unauthorized transactions in the Haryana state government account, leading to a difference of about ₹590 crore in the deposit balance. When such a situation occurs, many customers of that branch become worried about what will happen to their deposits. Can they withdraw their money? If yes, how much? Let’s look at the IDFC First Bank case, whether the lender has made any comments about the account holder’s deposits, what is the Reserve Bank of India (RBI)’s stand on the matter, and what consumer rights they have regarding their bank deposits.
What is IDFC First Bank case?
IDFC First Bank said in its filing to BSE that based on initial internal assessment (following communication with a specific department of the Government of Haryana), the bank had identified an incident of unauthorized and fraudulent activities by certain employees at a specific branch in Chandigarh. The bank said that other people/entities/counterparties may also be involved in this incident.
According to the bank, the details of the case are as follows:
The bank received a request from a particular department of the Haryana Government to close its account and transfer funds to another bank. During this process, some discrepancy was noticed between the amount stated and the account balance. From February 18, 2026, some other entities of the Government of Haryana contacted the bank regarding their respective accounts. During this process, discrepancies were noticed between the account balance and the balance reported by these Haryana Government entities maintaining accounts with the bank.
According to IDFC First, a fraud of ₹590 crore was committed in the accounts of the Haryana government in connivance with bank employees and external parties. The issue was limited to one unit and one customer group and did not spread to other customers of the Chandigarh branch. This is not a case of systemic reporting error.
Haryana Government has de-empanelled IDFC First Bank and AU Small Finance Bank for government business with immediate effect till further orders. PTI reported that no government funds will be parked, deposited, invested or transacted through these institutions.
How much money is being matched in IDFC First Bank case?
A total of about ₹590 crore is being reconciled in the accounts identified in the Chandigarh Bank branch. IDFC First Bank said it has started an investigation and plans to recover the money through legal and disciplinary action.
What did RBI say on IDFC First Bank case?
In a joint press conference with Finance Minister Nirmala Sitharaman, RBI Governor Sanjay Malhotra said about the IDFC First Bank case that they are monitoring the developments and there is no systemic issue.
What can happen to the deposits of IDFC first customers?
Although IDFC First Bank has not yet said what will happen to the deposits of its branch customers, but as per general guidelines, all bank deposits are covered under the Deposit Insurance and Credit Guarantee Corporation of India (DICGC) insurance scheme with certain limits and conditions. Under the DICGC scheme, each depositor of each bank is covered up to a maximum of ₹5 lakh (including principal and interest) in the event of bank failure, liquidation or merger. Fixed Deposit (FD), Savings Account, Recurring Deposit (RD) and Current Account are all covered under insurance.
