Giving information, private lender IDFC First Bank has said that some employees of its Chandigarh branch had made transactions in the accounts linked to the Haryana State Government without permission, resulting in a deposit balance difference of about Rs 590 crore. When such a case happens, many customers of that bank branch become wary about what will happen to their bank deposits. Can they withdraw their amount or not? If yes, how much? Let us find out what the IDFC First Bank case is, did the lender say anything about the account holder’s deposits, what is the stand of the Reserve Bank of India (RBI) on this matter, and what are the rights of consumers regarding their deposits in the bank?
What is the IDFC First Bank issue?
IDFC First Bank said in its filing to BSE that based on initial internal assessment (on receipt of communication from 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 says 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 discrepancies were observed between the amount reported and the account balance.
Since February 18, 2026, some other entities of the Haryana Government have interacted with the bank regarding their respective accounts. During this process, a discrepancy was noticed between the balance in the account and the balance reported by the said entities of Haryana Government maintaining the account in the bank.
According to IDFC First, a fraud of Rs 590 crore related to the accounts of Haryana government was carried out through the collusion of bank employees and outside parties. The issue was limited to one unit and one customer group and does not extend to other customers of the Chandigarh branch. This is not a case of any 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 amount is being matched in case of IDFC First Bank?
In total, about Rs 590 crore is being reconciled in the accounts identified in 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 we are keeping an eye on the development, there is no system related problem.
What can happen to the deposits of IDFC first customers?
Although IDFC First Bank has not yet told what will happen to the deposits of its branch customers, but as per general guidelines, all bank deposits are covered under the insurance scheme of Deposit Insurance and Credit Guarantee Corporation of India (DICGC) with certain limits and conditions. Under the DICGC scheme, it covers a maximum of Rs 5 lakh per depositor per bank (including principal and interest) in the event of bank failure, liquidation or merger. Fixed deposits (FDs), savings accounts, recurring deposits (RDs) and current accounts are all covered under insurance.