IDFC First Bank Ltd is in focus after disclosing the findings of an independent forensic review by KPMG into the ₹646 crore fraud uncovered at its Sector-32 branch in Chandigarh.
The bank said the review confirmed that the irregularities were confined to the Chandigarh branch and that no similar discrepancies were detected across its nationwide operations.
Shares of IDFC First Bank were trading at around ₹72.08 on the NSE, down 0.32%. The lender has a market capitalisation of ₹62,058.82 crore.
Fraud involved branch employees and external parties
According to the KPMG report, the fraud involved alleged collusion between:
- Certain current and former branch employees
- Officials associated with some government departments
- External individuals
The investigation found that unauthorised transactions were carried out by manipulating documents and bypassing branch-level controls.
Funds were allegedly withdrawn or transferred without valid authorisation from account holders.
Amount involved estimated at ₹646 crore
KPMG estimated the net principal amount involved at about ₹646 crore, in line with the bank’s earlier disclosures.
The affected accounts mainly belonged to government departments and institutions.
IDFC First Bank said it has:
- Reimbursed affected entities
- Paid applicable interest
- Recognised the financial impact in its Q4FY26 results
What the investigation found
KPMG examined 56 government and institutional accounts linked to the Chandigarh branch.
According to the report, the alleged fraud involved:
- Forged or modified authorisation letters
- Altered cheques
- Manipulated approval emails
- Fabricated fixed deposit-related documents
The investigation also found that some beneficiaries of the diverted funds had business or family connections with former bank employees.
No discrepancies found outside Chandigarh
Following the incident, IDFC First Bank carried out a nationwide review of government and institutional accounts.
The bank said:
- No additional claims were received
- No similar discrepancies were identified outside the Chandigarh branch
It added that records in the Core Banking System remained accurate throughout the period.
Customers continued to receive:
- Account statements
- Transaction alerts
Additional safeguards introduced
After the incident, the bank strengthened its control framework.
Measures introduced include:
- Centralised oversight mechanisms
- Stronger authorisation procedures
- Enhanced customer communication processes
- Technology-driven monitoring systems
Management said these steps would improve the bank’s risk management framework.
About the bank
IDFC First Bank Ltd was formed after the merger of IDFC Bank and Capital First on December 18, 2018.
The bank provides:
- Retail banking services
- Corporate banking
- Treasury operations
- Wealth management
- Digital banking solutions
It serves individuals, MSMEs and corporate customers across India.
TL;DR
KPMG’s forensic review has confirmed that the ₹646 crore fraud at IDFC First Bank was restricted to its Chandigarh branch. The bank has reimbursed affected customers and said no similar discrepancies were found elsewhere.
AI Summary
- KPMG confirmed the ₹646 crore fraud was limited to one branch.
- The incident involved alleged collusion by employees and external parties.
- Affected customers have been compensated with interest.
- No discrepancies were found outside the Chandigarh branch.
- IDFC First Bank has strengthened internal controls.
