-Friday World – 26 February 2026
→ What exactly happened? How did employees at one branch orchestrate such a large-scale fraud?
→ And how did the bank respond to contain the damage?
The Full Story of the Fraud: Siphoning from Haryana Government Accounts
The fraud came to light when certain Haryana government departments requested the closure and transfer of their account balances to another bank. During routine reconciliation, the bank noticed a significant discrepancy — a deposit mismatch of about ₹590 crore in accounts linked to Haryana state entities at its Chandigarh Sector-32 branch.
Investigations revealed that unauthorized and fraudulent transactions were carried out using fake cheques and payment instructions. Funds from these government accounts were allegedly diverted to a private company called Swastik Desh Projects, in which family members of the accused had stakes
. → Key accused individuals included: - Ribhav Rishi (former Branch Manager of the Chandigarh Sector-32 branch, who left the job about six months ago) - Abhay (former Relationship Manager) - Swati Singla (Abhay's wife) - Abhishek Singla (Swati's brother) Preliminary probes showed that around ₹300 crore of the diverted funds landed in Swastik Desh Projects' account at AU Small Finance Bank. The Haryana State Vigilance and Anti-Corruption Bureau (ACB) arrested all four individuals. The bank immediately suspended four employees involved, launched a forensic audit, filed a police complaint, and informed the Reserve Bank of India (RBI).
Bank's Swift Action: Full Repayment to Restore Trust In a strong display of customer-first policy, IDFC First Bank repaid 100% of the principal amount plus interest to the affected Haryana government departments — totaling a net payout of ₹583 crore — even while the investigation was ongoing.
→ The bank emphasized: "This is an isolated incident limited to one branch and one client group. There is no systemic issue."
→ It highlighted that "Customer First" is in its DNA, and quick repayment was made to protect depositor confidence despite the probe. In response, the Haryana government removed IDFC First Bank (along with AU Small Finance Bank) from its empanelled list and instructed departments to close accounts with these banks.
Heavy Impact on the Market: ₹14,438 Crore Vanished in One Session! As soon as news of the fraud broke, the bank's shares crashed up to 20% on Monday. From a previous close around ₹83, the stock hit an intraday low of ₹66.85. This single-session plunge erased about ₹14,438 crore from the bank's market cap. Major shareholders like LIC and the Government of India also faced significant mark-to-market losses.
→ The fraud amount exceeded the bank's Q3 net profit of ₹503 crore, raising serious questions about governance and internal controls.
→ Later in the day, shares showed some recovery, but investor sentiment remained cautious. → Some analysts believe the bank's strong capital adequacy ratio (around 16.22%) and low NPAs could support long-term recovery, though near-term headwinds persist.
Key Lesson: Trust is the Biggest Capital in Banking This incident serves as a stark warning for the Indian banking sector. A conspiracy at middle and lower levels in a single branch — using old-school methods like fake cheques — caused massive damage. Weak internal controls can still allow such frauds in the digital age.
→ However, IDFC First Bank's prompt repayment helped preserve some customer trust.
→ For investors, it underscores how quickly one negative news item can erode valuations — a ₹590 crore fraud triggered over ₹14,000 crore in market value loss because trust, once shaken, has no fixed price!
Sajjadali Nayani ✍
Friday World – 26 February 2026
