Synopsis: IDFC First Bank informed exchanges that an independent forensic review conducted by KPMG has reaffirmed that the Rs. 646 crore fraud was limited to its Sector-32 branch in Chandigarh. The bank stated that it has already reimbursed affected customers, strengthened internal controls and found no similar discrepancies across its nationwide network.
Shares of IDFC First Bank Limited are likely to remain in focus after the bank disclosed the findings of an independent forensic review conducted by KPMG regarding the unauthorized and fraudulent activities detected at its Sector-32 branch in Chandigarh.
IDFC First Bank Limited has a total market capitalization of over Rs. 62,058.82 crore. The company’s shares were trading at around Rs. 72.08 per share on the National Stock Exchange, down by 0.32 percent. The stock remains closely tracked by investors due to its growing retail banking franchise and expanding loan and deposit portfolio.
According to the forensic review conducted by KPMG, the fraud was centered at IDFC First Bank’s Sector-32 branch in Chandigarh and involved alleged collusion between certain current and former branch employees, officials associated with some government departments, and external individuals. The investigation found that unauthorized transactions were carried out by manipulating documentation and bypassing branch-level controls, allowing funds to be withdrawn or transferred without valid authorization from account holders.
The forensic report estimated the net principal amount involved at around Rs. 646 crore, in line with the bank’s earlier disclosures. The affected accounts largely belonged to government departments and institutions. IDFC First Bank has already reimbursed the affected entities, including applicable interest, and recognized the financial impact in its Q4FY26 results.
KPMG’s investigation covered 56 government and institutional accounts linked to the Chandigarh branch. The report indicated that forged or modified authorization letters, altered cheques, manipulated approval emails, and fabricated fixed deposit-related documents were allegedly used to facilitate unauthorized fund transfers. The investigation also found that some beneficiaries of the diverted funds had business or family links with former bank employees.
Despite the fraud, the bank stated that its Core Banking System records remained accurate and that customers continued to receive account statements and transaction alerts. Following the discovery of the incident, IDFC First Bank conducted a nationwide verification exercise covering government and institutional accounts and said no additional claims or discrepancies were identified outside the Chandigarh branch.
To prevent similar incidents in the future, IDFC First Bank has implemented several additional safeguards, including centralized oversight mechanisms, enhanced customer communication processes, strengthened authorization protocols and technology-led monitoring controls. The management stated that these measures would significantly strengthen the bank’s risk management and control framework going forward.
Incorporated in 2014, IDFC First Bank Limited is engaged in the business of banking and financial services. The bank was formed through the merger of erstwhile IDFC Bank and Capital First on December 18, 2018. It offers retail banking, corporate banking, treasury services, wealth management and digital banking solutions to individuals, MSMEs and corporate customers across India.
While the Chandigarh fraud incident resulted in a significant one-time financial impact, the forensic findings indicated that the issue was confined to a single branch and the bank’s proactive corrective measures may provide reassurance to investors regarding the strength of its broader banking operations and governance framework.
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