- IDFC First Bank has confirmed fraud at one Chandigarh branch involving employee collusion
- Rs 590 crore fraud involved forged checks and manual debit instructions, says CEO Vaidyanathan
- Four employees suspended, police complaints filed, and KPMG hired for forensic audit
In the wake of the recent fraud involving Haryana government accounts, the management of IDFC First Bank has assured investors on Monday that the entire fiasco was an 'isolated incident' restricted to a single Chandigarh branch, driven by employee collusion.
"The main issue which we have observed here is that certain employees of this branch, most possibly in connivance with external parties, have fraudulently transferred these amounts to beneficiaries who had accounts outside of our bank," the management said in a conference call.
CEO V. Vaidyanathan described the event as a physical, non-digital breach involving forged checks and manual debit instructions. "This is, let me say, the oldest kind of fraud probably known to banking," Vaidyanathan said. "How this has happened is obviously due to the connivance of employees."
The bank initially identified a Rs 490 crore discrepancy following a government request to transfer funds, later uncovering an additional estimated Rs 100 crore through internal scans. Despite the scale, management emphasised the bank's financial resilience.
"The bank is now fundamentally in a strong position," Vaidyanathan noted, pointing out that operating profits are rising. "This incident will pass. But this incident will pass through the P&L as and when it comes, and we will take it out."
The bank has suspended four suspected employees, filed police complaints, and hired KPMG for an independent forensic audit. Officials confirmed that total Haryana government deposits make up roughly 0.5% of the bank's total deposits, minimising systemic risk.
"We will get to the bottom of this. We will spare no one," Vaidyanathan said. "If there is anything in the grey zone where we feel the counterparties are involved, or employees of counterparties are involved, we will speak with them as constructively as possible and try to find a meaningful solution."
ALSO READ: IDFC First Bank Alleged Fraud: Brokerage Downplays Impact As 'Operational Risk'
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