IDFC First Bank on Friday said it has received the forensic review report from KPMG regarding the fraud incident at its Chandigarh branch, with the findings reaffirming that the episode was an isolated case involving collusion between certain current and former bank employees, employees of government departments, and third parties.
In an exchange filing on Friday, the private sector lender said the forensic review quantified the net principal amount involved in the fraud at around Rs 646 crore, in line with the bank's earlier disclosures.
The bank stated that the Board of Directors took note of the findings of the forensic review report at its meeting held on Friday.
According to the report, the fraudulent activities were confined to a single branch and no similar incidents have been identified across any other branch of the bank. The findings pointed to collusion involving certain employees and ex-employees of the Chandigarh branch, employees of customer entities belonging to state government departments, and external parties.
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"The Bank is a victim of this financial fraud," IDFC First Bank said, adding that it is cooperating with investigative authorities in the matter.
The lender said it has already paid the affected government departments the principal amount along with applicable interest and recognised the impact in its books during the fourth quarter of fiscal year 2026.
The bank further noted that records maintained in its Core Banking System (CBS) remained accurate throughout the period. Customers continued to receive monthly account statements reflecting balances and transactions, while transaction alerts were also sent through SMS wherever applicable under existing processes.
As part of its review following the incident, IDFC First Bank said it dispatched physical and electronic account statements showing closing balances as of Feb. 28, 2026, to all government and TASC (Trusts, Associations, Societies and Clubs) account holders across the country. The bank said it has not received any discrepancies or claims from any other customers.
Following the incident, the lender has introduced additional preventive controls aimed at strengthening oversight and mitigating collusion risks at the branch level. These measures include enhanced supervision by centralised teams alongside branch-level authorisations, stronger customer communication mechanisms, and technology-driven system controls.
The bank said the strengthened control framework would help reinforce governance standards, improve operational oversight, and support its long-term objective of building a world-class banking franchise in India.
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