Ankitasharma at 10:31, 11 April 2026

2026-04-11T10:31:00Z

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{{Short description|Financial fraud in India}}

{{Financial risk types}}

The '''Haryana Government accounts fraud''' is a series of financial irregularities of approximately {{INRConvert|950|c|year=2026}} that was uncovered in February 2026 at the Chandigarh branches of [[IDFC First Bank]]<ref>{{Cite web |date=22 February 2026 |title=IDFC First Bank flags Rs 590-cr fraud linked to Haryana Govt accounts, Chandigarh branch under lens |url=https://www.tribuneindia.com/news/chandigarh/idfc-first-bank-flags-rs-590-cr-fraud-linked-to-haryana-govt-accounts-chandigarh-branch-under-lens/ |access-date=2026-02-24 |website=[[The Tribune (India)|The Tribune]] |language=en}}</ref>, [[AU Small Finance Bank]]<ref name=":11">{{Cite news |date=2026-02-24 |title=AU Small Finance Bank begins internal probe after Haryana account fiasco |url=https://economictimes.indiatimes.com/industry/banking/finance/banking/au-small-finance-bank-begins-internal-probe-after-haryana-account-fiasco/articleshow/128727078.cms?from=mdr |access-date=2026-04-11 |work=The Economic Times |issn=0013-0389}}</ref>, and [[Kotak Mahindra Bank]]<ref name=":10" />, primarily affecting bank accounts linked to departments, boards, and entities of the [[Government of Haryana]] under schemes such as ''Mukhya Mantri Grameen Awas Yojna 2.0''.<ref name=":5">{{Cite web |last=Manav |first=Sushil |date=2026-02-24 |title=Rs 578 crore for housing scheme vanishes from Haryana govt bank accounts, back in 24 hrs. What FIR says |url=https://theprint.in/india/governance/rs-578-crore-for-housing-scheme-vanishes-from-haryana-govt-bank-accounts-back-in-24-hrs-what-fir-says/2862761/ |access-date=2026-02-25 |website=ThePrint |language=en-US}}</ref> The discrepancies arose from unauthorised transactions allegedly conducted by certain bank employees in possible collusion with external parties.<ref>{{Cite web |last=Mathew |first=George |date=2026-02-23 |title=How the Rs 590-crore fraud unfolded at IDFC Bank branch |url=https://indianexpress.com/article/explained/explained-economics/idfc-bank-590-crore-fraud-10547832/ |access-date=2026-02-25 |website=[[The Indian Express]] |language=en}}</ref> Following this, the state government passed a mandate to remove private banks from its list of banks authorised to handle state government business.<ref>{{Cite news |last=Shukla |first=Saloni |last2=Ray |first2=Atmadip |date=2026-02-23 |title=Haryana mandates exclusive banking with public sector banks, drops IDFC First and AU Small Finance |url=https://economictimes.indiatimes.com/industry/banking/finance/banking/haryana-mandates-exclusive-banking-with-public-sector-banks-drops-idfc-first-and-au-small-finance/articleshow/128687685.cms?from=mdr |access-date=2026-04-11 |work=The Economic Times |issn=0013-0389}}</ref><ref>{{Cite news |date=2026-02-22 |title=Haryana govt to stay away from private banks |url=https://timesofindia.indiatimes.com/business/india-business/haryana-govt-to-stay-away-from-private-banks/articleshow/128672491.cms |access-date=2026-04-11 |work=The Times of India |issn=0971-8257}}</ref>

== Background ==
The alleged fraud surfaced when a Haryana government department requested the closure of an account at IDFC First Bank's Chandigarh branch and the transfer of its balance to another bank. Reconciliation revealed a mismatch between the department's reported balance and the funds available in the bank's records. Further internal checks found problems in a particular group of Haryana government-linked accounts.<ref name=":6">{{Cite web |last=Sharma |first=Pawan |last2=Rao |first2=Hitender |date=2026-02-24 |title=₹590 crore, govt-linked accounts involved: What's the alleged Haryana IDFC Bank fraud? |url=https://www.hindustantimes.com/india-news/rs-590-crore-govt-linked-accounts-involved-whats-the-alleged-haryana-idfc-bank-fraud-101771919539829.html |access-date=2026-02-24 |website=[[Hindustan Times]] |language=en}}</ref> At the time of its discovery, the total amount being reviewed is on or about {{INRConvert|590|c}}, which includes an earlier shortfall of {{INRConvert|490|c|year=2026}} and another {{INRConvert|100|c|year=2026}} found later through internal audits.<ref>{{Cite news |last=Shukla |first=Saloni |date=2026-02-23 |title=IDFC First Bank tightens high value transaction controls; forensic findings due in 4–5 weeks |url=https://economictimes.indiatimes.com/industry/banking/finance/banking/idfc-first-bank-tightens-high-value-transaction-controls-forensic-findings-due-in-45-weeks/articleshow/128710599.cms?from=mdr |access-date=2026-02-24 |work=The Economic Times |issn=0013-0389}}</ref> The bank reported this issue to regulators on 22 February 2026.<ref name=":4">{{Cite news |last=Mishra |first=Lalatendu |date=2026-02-22 |title=IDFC FIRST Bank Chandigarh branch discloses ₹590 crore fraud |url=https://www.thehindu.com/business/Industry/idfc-first-bank-discloses-590-crore-fraud-at-chandigarh-branch/article70662688.ece |access-date=2026-02-24 |work=The Hindu |language=en-IN |issn=0971-751X}}</ref>

=== Involvement of IDFC First Bank ===
IDFC First Bank's preliminary assessment indicated that certain employees at the Chandigarh branch had conducted unauthorised activities, potentially involving collusion with external entities and the use of forged physical cheques.<ref>{{Cite news |last=Mishra |first=Lalatendu |date=2026-02-23 |title=Bank staff colluded with outsiders in ₹590 crore fraud case: IDFC FIRST Bank MD |url=https://www.thehindu.com/business/Industry/staff-collusion-led-to-haryana-government-account-fraud-idfc-bank/article70666253.ece |access-date=2026-02-24 |work=The Hindu |language=en-IN |issn=0971-751X}}</ref> The bank suspended four officials, filed a police complaint, and informed the [[Reserve Bank of India]].<ref>{{Cite web |last=Fernandes |first=Jocelyn |date=2026-02-23 |title=How the IDFC First Bank scam unfolded: From employees in dock for ₹590 crore fraud, timeline of events to what's ahead {{!}} Company Business News |url=https://www.livemint.com/companies/news/idfc-first-bank-scam-unfold-how-employees-in-the-dock-590-crore-fraud-timeline-audit-review-recovery-whats-ahead-11771826661216.html |access-date=2026-02-24 |website=mint |language=en}}</ref> The bank's CEO [[V. Vaidyanathan]] described the incident as isolated to one branch and one client group, with no systemic control failure.<ref>{{Cite news |date=2026-02-23 |title=₹590 crore fraud at IDFC First Bank: How one branch defrauded govt accounts & rattled bank’s shares |url=https://economictimes.indiatimes.com/industry/banking/finance/banking/idfc-first-bank-590-crore-fraud-how-one-branch-defrauded-govt-accounts-rattled-banks-shares/articleshow/128704042.cms?from=mdr |access-date=2026-02-24 |work=The Economic Times |issn=0013-0389}}</ref> Vaidyanathan stated that the case involves debit instructions that appeared to originate from a client (a Haryana government department), but bank staff processed them despite clear indications of fraud. Money was then transferred from the client’s account to parties outside the bank. The fraud mainly happened through physical cheque transactions that required the collusion of employees.<ref name=":3">{{Cite web |title=How a simple bank request unearthed four IDFC First Bank staff's Rs 590-crore fraud |url=https://www.moneycontrol.com/banking/how-a-simple-bank-request-unearthed-four-idfc-first-bank-staff-s-rs-590-crore-fraud-article-13840250.html |archive-url=http://web.archive.org/web/20260223153833/https://www.moneycontrol.com/banking/how-a-simple-bank-request-unearthed-four-idfc-first-bank-staff-s-rs-590-crore-fraud-article-13840250.html |archive-date=2026-02-23 |access-date=2026-02-24 |website=Moneycontrol |language=en-US}}</ref>

=== Involvement of AU Small Finance Bank ===
AU Small Finance Bank was de-empanelled by the Haryana government<ref name=":0">{{Cite web |last=Iyer |first=Archishma |title=De-empanelled by Haryana, AU Small Finance Bank opens probe, sends staff 'offduty' |url=https://www.moneycontrol.com/news/business/de-empanelled-by-haryana-au-small-finance-bank-opens-probe-sends-staff-offduty-13839206.html |archive-url=http://web.archive.org/web/20260223041936/https://www.moneycontrol.com/news/business/de-empanelled-by-haryana-au-small-finance-bank-opens-probe-sends-staff-offduty-13839206.html |archive-date=2026-02-23 |access-date=2026-02-24 |website=Moneycontrol |language=en-US}}</ref> as it was identified as the intermediary bank that received the funds.<ref name=":5" /> The state had queried the bank regarding suspected unauthorised transactions totaling approximately {{INRConvert|72|c|year=2026}}, out of which {{INRConvert|47|c|year=2026}} was transferred from a government account to a customer account in 14 transactions.<ref>{{Cite web |last=Fernandes |first=Jocelyn |date=2026-02-23 |title=AU Small Finance Bank de-empanelment: What we know about ₹47 crore funds transfer, timeline, internal review details {{!}} Company Business News |url=https://www.livemint.com/companies/news/au-small-finance-bank-clarify-de-empanelment-haryana-govt-account-transactions-internal-review-assess-reasons-idfc-first-11771811075341.html |access-date=2026-02-24 |website=mint |language=en}}</ref> The bank clarified that these were conducted in the normal course of business with proper authorisation, and denied any wrongdoing or fraud on its part. It also stated that it had closed one relevant government account in January 2026 according to departmental instructions and an initial credit of {{INRConvert|25|c|year=2026}} plus interest was remitted to the original bank.<ref>{{Cite news |date=24 February 2026 |title=AU SFB tanks 7%; de-empanelment may trigger trust deficit, say analysts |url=https://www.business-standard.com/markets/news/au-small-finance-bank-share-price-nse-bse-haryana-de-empanels-state-accounts-126022300112_1.html |access-date=24 February 2026 |work=[[Business Standard]]}}</ref>

=== Involvement of Kotak Mahindra Bank ===
On 25 March 2026, a fresh discrepancy involving fixed deposits of the [[Panchkula Municipal Corporation]] was detected at Kotak Mahindra Bank's Sector-11 branch in Panchkula. Municipal officials discovered it when they instructed the bank to transfer funds from a maturing fixed deposit; reconciliation revealed that {{INRConvert|150|c}} including one {{INRConvert|58|c}} crore fixed deposits that the bank stated did not exist was missing from the corporation's accounts.<ref>{{Cite web |title=After IDFC fraud, Rs 150-crore scam detected in Panchkula MC’s account in Kotak Mahindra Bank |url=https://www.tribuneindia.com/news/haryana/after-idfc-fraud-150-crore-scam-detected-in-panchkula-mcs-account-in-kotak-mahindra-bank/ |access-date=2026-04-11 |website=The Tribune |language=en}}</ref><ref name=":10">{{Cite web |last=Service |first=Express News |date=2026-03-25 |title=Kotak Mahindra Bank files FIR after Panchkula municipality flags Rs 160 crore FD fraud |url=https://www.newindianexpress.com/business/2026/Mar/25/kotak-mahindra-bank-files-fir-after-panchkula-municipality-flags-rs-160-crore-fd-fraud |access-date=2026-04-11 |website=The New Indian Express |language=en}}</ref>

Later, the bank confirmed the shortfall, and filed an FIR with Panchkula police for independent examination. Haryana Chief Secretary Anurag Rastogi directed the Haryana State Vigilance and Anti-Corruption Bureau (SV&ACB) to investigate possible collusion between municipal officials and bank staff.<ref>{{Cite news |last=Manav |first=Sushil |date=25 March 2026 |title=Haryana govt’s Rs 150-crore fixed deposits in Kotak go missing. It’s similar to ‘IDFC fraud playbook’ |url=https://theprint.in/india/haryana-govts-rs-150-crore-fixed-deposits-in-kotak-go-missing-its-similar-to-idfc-fraud-playbook/2888407/ |access-date=11 April 2026 |work=[[ThePrint]]}}</ref>

== Investigation ==

=== Committee findings ===
A three-member committee of Haryana’s Development and Panchayats Department found that two bank accounts were opened on 26 September 2025 under the ''Mukhya Mantri Grameen Awas Yojna 2.0 scheme;'' one with IDFC First Bank and one with AU Small Finance Bank at their Sector 32 branches in Chandigarh. As instructed by the state finance department, {{INRConvert|50|c|year=2026}} was placed in the IDFC First Bank account and {{INRConvert|25|c|year=2026}} in the AU Small Finance Bank account. No authority ever approved the use of this money; it was supposed to remain untouched. The suspected fraud came to light in January 2026, when the finance department asked both banks to close the accounts and transfer the full amounts to an [[Axis Bank]] account.<ref name=":5" />

AU Small Finance Bank transferred the full amount and closed the account, but at IDFC First Bank, alleged actions by now-arrested employees resulted in only a partial transfer before the account was closed. When government officials checked transaction records, they found that several cheques and debit notes had been used to move money from the IDFC account. These documents appeared to carry forged signatures of a senior [[Indian Administrative Service]] officer, Dusmanta Kumar Behera. The department stated that it does not use cheques for this scheme, only debit notes. In total, over {{INRConvert|46|c|year=2026}} was transferred from IDFC First Bank to AU Small Finance Bank using these questionable instruments.<ref name=":5" />

The committee also found that transaction alerts were being sent to a mobile number registered to a superintendent in the Panchayats Department, and his statement was recorded. AU Small Finance Bank was described as non-cooperative, and its records showed payments to an unknown entity named ''Swastik Desh Projects.'' IDFC First Bank records also showed unexplained transactions involving other government bodies, raising fears that more accounts may be affected. The committee concluded that the case involves forgery and serious procedural lapses by officials of both banks and recommended a full investigation by the state police.<ref name=":5" /><ref>{{Cite web |last=Mathew |first=George |date=2026-02-23 |title=IDFC First Bank’s Rs 590-crore fraud: Why it highlights governance lapses |url=https://indianexpress.com/article/explained/explained-economics/idfc-first-banks-rs-590-crore-10546960/ |access-date=2026-02-25 |website=[[The Indian Express]] |language=en}}</ref>

=== Police findings ===
According to police press briefing on 25 February 2026, the fraud was allegedly led by former IDFC First Bank manager Ribhav Rishi. He headed the bank’s Sector 32 branch in Chandigarh until about six months earlier and left around August-September 2025. At the time of his arrest, he was working with AU Small Finance Bank in Chandigarh. Police say he colluded with former relationship manager Abhay Kumar, who had resigned in August 2025.<ref name=":8">{{Cite web |last=Siwach |first=Sukhbir |date=2026-02-25 |title=Company owned by ex-employee’s wife at heart of IDFC First Bank fraud: What vigilance probe revealed |url=https://indianexpress.com/article/cities/chandigarh/company-ex-employee-wife-idfc-first-bank-fraud-vigilance-probe-10551360/ |access-date=2026-02-26 |website=The Indian Express |language=en}}</ref>

They are accused of handling forged cheques and debit notes that showed mismatched amounts and carried Behera’s forged signatures. They allegedly approved illegal fund transfers, with about {{INRConvert|46.56|c}} initially traced and total diverted funds estimated between {{INRConvert|300|c}} and {{INRConvert|590|c}}. Some of the money was reportedly sent to private companies, including ''Swastik Desh Projects'' (the owners were not identified in the committee investigation), which is said to be owned by Rishi’s wife, Swati Singla, and her brother, Abhishek Singla.<ref name=":8" /> All four were arrested on the night of 24 February 2026.<ref>{{Cite web |last=Rao |first=Hitender |date=2026-02-26 |title=₹590-crore govt funds fraud case: Two former IDFC First Bank employees among 4 arrested |url=https://www.hindustantimes.com/cities/chandigarh-news/590crore-govt-funds-fraud-case-two-former-idfc-first-bank-employees-among-4-arrested-101772049756597.html |access-date=2026-02-26 |website=Hindustan Times |language=en}}</ref>

Further investigation by Haryana’s SV&ACB identified 52-year-old local real estate businessman Vikram Wadhwa as the main accused in the scam.<ref>{{Cite web |last=Gaur |first=Brijendra |date=2026-03-02 |title=₹590-cr govt funds fraud: Chandigarh realtor named ‘key conspirator’, ACB launches manhunt |url=https://www.hindustantimes.com/cities/chandigarh-news/590cr-govt-funds-fraud-chandigarh-realtor-named-key-conspirator-acb-launches-manhunt-101772391934684.html |access-date=2026-03-05 |website=Hindustan Times |language=en}}</ref> According to investigators, Wadhwa used his connections with senior government officials to persuade several Haryana departments including the School Shiksha Pariyojna Parishad, State Pollution Control Board, Power Generation Corporation, Development and Panchayats Department, and Panchkula Municipal Corporation to place public funds as fixed deposits in a private bank. The money was later diverted through shell companies such as Swastik Desh Project.<ref name=":9">{{Cite web |last=Victor |first=Hillary |date=2026-03-03 |title=Fraud involving Haryana government accounts: From caretaker to ₹590 crore scam ‘kingpin’ |url=https://www.hindustantimes.com/cities/chandigarh-news/fraud-involving-haryana-government-accounts-from-caretaker-to-590-crore-scam-kingpin-101772478598916.html |access-date=2026-03-05 |website=Hindustan Times |language=en}}</ref> Approximately {{INRConvert|100|c}} was reportedly used to buy gold through jwellers, while about {{INRConvert|10|c}} was transferred to relatives and associates before being withdrawn as cash.<ref>{{Cite web |last=Siwach |first=Sukhbir |date=2026-03-04 |title=IDFC First Bank Rs 590 crore fraud: From government accounts to jewellery shops, uncovering the trail of siphoned crores |url=https://indianexpress.com/article/explained/explained-economics/idfc-first-bank-fraud-rs-590-crore-money-trail-10564377/ |access-date=2026-03-05 |website=The Indian Express |language=en}}</ref> Wadhwa, who reportedly owns properties worth over ₹100 crore in Chandigarh along with a luxury farmhouse and expensive vehicles, went into hiding after the scam came to light, prompting authorities to issue a [[look out circular]] against him. On 28 February 2026, [[Mohali]] businessman Manish Jindal was arrested for his alleged involvement in the conspiracy.<ref name=":9" />

On 11 March 2026, the [[Enforcement Directorate]] raided 19 locations in and around Chandigarh, Haryana, and the National Capital Region to track the flow of money.<ref>{{Cite web |date=2026-03-11 |title=IDFC First Bank fraud case: ED conducts searches across 19 locations in Chandigarh, Haryana, NCR |url=https://indianexpress.com/article/india/idfc-first-bank-fraud-case-ed-searches-locations-chandigarh-haryana-ncr-10576868/ |access-date=2026-03-17 |website=The Indian Express |language=en}}</ref><ref>{{Cite web |title=ED Searches 19 Locations In Rs 590 Cr IDFC First Bank Fraud Probe |url=https://www.businessworld.in/article/ed-searches-19-locations-in-rs-590-cr-idfc-first-bank-fraud-probe-597206 |access-date=2026-03-17 |website=BW Businessworld |language=en}}</ref> This led to arrest of Rajan Katodia on 14 March 2026, the owner of Chandigarh-based Sawan Jewellers, who allegedly received an amount exceeding {{INRConvert|250|c}} from various firms linked to the accused, including Vikram Wadhwa ''et al''.<ref>{{Cite news |last=PTI |date=2026-03-14 |title=Jeweller arrested in IDFC First Bank fraud case in Haryana; 12th arrest |url=https://www.thehindu.com/news/national/haryana/jeweller-arrested-in-idfc-first-bank-fraud-case-in-haryana-12th-arrest/article70744622.ece |access-date=2026-03-17 |work=The Hindu |language=en-IN |issn=0971-751X}}</ref> On 16 March 2026, the two Haryana government officials, Rajesh Sangwan and Randhir Singh, who were posted as Finance and Accounts Controllers at the Haryana State Agricultural Marketing Board and the Haryana School Shiksha Pariyojna Parishad. They are accused of colluding with Katodia to divert government funds and of taking large amounts of money as illegal payments.<ref>{{Cite web |date=2026-03-16 |title=2 Haryana govt officials arrested in IDFC bank case |url=https://www.hindustantimes.com/cities/chandigarh-news/2-haryana-govt-officials-arrested-in-idfc-bank-case-101773600489826.html |access-date=2026-03-17 |website=Hindustan Times |language=en}}</ref>

In a related development, the Haryana SV&ACB arrested Kotak Mahindra Bank's relationship manager Dileep Kumar Raghav on the night of 25 March 2026. Raghav was allegedly involved in sending fake reports regarding fixed deposits to the Panchkula Municipal Corporation. Later, he was produced before a local court in Panchkula on 26 March 2026 and remanded to four-day police custody on charges of cheating, forgery, criminal breach of trust, and under the Prevention of Corruption Act.<ref>{{Cite web |last=Singh Thakur |first=Bhartesh |title=Rs 150 crore Kotak Bank scam: Relationship manager sent to 4-day police custody |url=https://www.tribuneindia.com/news/chandigarh/rs-150-crore-kotak-bank-scam-relationship-manager-sent-to-4-day-police-custody/ |access-date=2026-04-11 |website=The Tribune |language=en}}</ref>

On 8 April 2026, Kotak Mahindra Bank's Deputy Vice-President Pushpender Singh surrendered before the Haryana SV&ACB in connection with the linked ₹150 crore Panchkula Municipal Corporation fixed-deposit fraud; he was arrested the same day and remanded to five days' police custody by a Panchkula court the following day.<ref>{{Cite web |last=Siwach |first=Sukhbir |date=2026-04-08 |title=Rs 150-crore fraud: Kotak Mahindra Bank deputy V-P Pushpender Singh surrenders in Panchkula case |url=https://indianexpress.com/article/cities/chandigarh/rs-150-crore-fraud-kotak-mahindra-bank-deputy-v-p-pushpender-singh-surrenders-in-panchkula-case-10625583/ |access-date=2026-04-11 |website=The Indian Express |language=en}}</ref>

On 9 April 2026, Haryana Chief Secretary Rastogi suspended two [[Indian Administrative Service]] officers: Pardeep Kumar of 2011 batch, Director of Haryana Transport Department and Ram Kumar Singh of 2012 batch, Special Secretary in Revenue and Disaster Management Department and former Municipal Commissioner of Panchkula in connection with alleged irregularities and collusion in the diversion of government funds.<ref>{{Cite web |last=Bhatia |first=Varinder |date=2026-04-09 |title=Rs 590 crore IDFC First Bank scam: Haryana suspends 2 IAS officers as vigilance probe intensifies |url=https://indianexpress.com/article/cities/chandigarh/idfc-first-bank-scam-haryana-suspends-ias-officers-vigilance-probe-10627316/ |access-date=2026-04-11 |website=The Indian Express |language=en}}</ref> The suspensions were issued under the All India Services (Discipline & Appeal) Rules, 1969.<ref>{{Cite web |date=2026-04-09 |title=₹550-crore bank fraud: Haryana suspends 2 IAS officers |url=https://www.hindustantimes.com/cities/chandigarh-news/two-ias-officers-suspended-as-haryana-probes-950-crore-banking-fraud-101775723261159.html |access-date=2026-04-11 |website=Hindustan Times |language=en}}</ref> The same day, the Haryana government handed over the entire investigation to the [[Central Bureau of Investigation]].<ref>{{Cite web |last= |first= |title=CBI Takes Over Probe into ₹550 Crore Haryana Government Fund Embezzlement |url=https://www.rediff.com/news/report/cbi-probes-idfc-bank-embezzlement-case/20260409.htm |access-date=2026-04-11 |website=Rediff |language=en}}</ref>

== Response ==
On 18 February 2026, the Haryana government issued a circular and subsequently further instructions around 22 February, directing all departments, boards, corporations, PSUs, and autonomous bodies to immediately close their accounts with both banks.<ref name=":7" /> They were asked to move their money to other banks and to take prior approval from the Finance Department before opening any new private bank accounts.<ref name=":7">{{Cite news |last=Sura |first=Ajay |date=2026-02-23 |title=Haryana govt makes finance dept approval mandatory for private banks after Rs 590-cr fraud |url=https://timesofindia.indiatimes.com/city/chandigarh/rs-590-cr-fraud-haryana-makes-finance-dept-approval-mandatory-for-private-bank-accounts/articleshow/128708638.cms |access-date=2026-02-24 |work=The Times of India |issn=0971-8257}}</ref>

On 23 February 2026, the Haryana's ACB filed a [[first information report]] based on the inquiry report prepared by a committee of Haryana’s Development and Panchayats Department against employees of IDFC First Bank and AU Small Finance Bank, as well as unknown government officials, to investigate their suspected role in irregularities in unauthorised fund movements in two Haryana government accounts opened with IDFC First Bank and AU Small Finance Bank under the ''Mukhya Mantri Grameen Awas Yojna 2.0'' scheme, at branches located in Sector 32, Chandigarh.<ref name=":6" /><ref name=":5" /><ref name=":3" />

As of 24 February 2026, IDFC First Bank had replenished {{INRConvert|578|c|lk=2026}} crore to the accounts of the state's departments, which includes {{INRConvert|556|c|lk=|year=2026}} as deposits and {{INRConvert|22|c|year=2026}} returned as interest, as confirmed by [[Chief Minister of Haryana]] [[Nayab Singh Saini]] during a session of the [[Haryana Legislative Assembly]].<ref>{{Cite news |last=Singh Chinna |first=Gurpreet |date=24 February 2026 |title="Money Recovered Within 24 Hours": Nayab Saini On Rs 578 Crore Fraud At IDFC First Bank |url=https://www.ndtv.com/india-news/money-recovered-within-24-hours-nayab-saini-on-rs-578-crore-fraud-at-idfc-first-bank-11129230 |access-date=24 February 2026 |work=[[NDTV]]}}</ref><ref>{{Cite news |last=Jagannath |first=J |date=24 February 2026 |title=Haryana CM says Rs 556 crore recovered from IDFC First Bank, lender's shares rise 1% |url=https://www.moneycontrol.com/news/business/markets/haryana-cm-says-rs-556-crore-recovered-from-idfc-first-bank-lender-s-shares-in-green-13841264.html |access-date=24 February 2026 |work=[[Moneycontrol]]}}</ref> Also, the bank appointed [[KPMG]] for the forensic audit and convened its Special Committee for Monitoring Frauds, Audit Committee, and Board of Directors.<ref name=":4" /> A police complaint was filed, with potential additional complaints planned.<ref>{{Cite web |date=2026-02-23 |title=IDFC FIRST Bank selects KPMG for forensic audit of Rs 590 cr fraud after Haryana government suspends business ties - BusinessToday |url=https://www.businesstoday.in/latest/corporate/story/idfc-first-bank-selects-kpmg-for-forensic-audit-of-rs-590-cr-fraud-after-haryana-government-suspends-business-ties-517467-2026-02-23 |access-date=2026-02-24 |website=Business Today |language=en}}</ref><ref name=":1">{{Cite web |last=Shukla |first=Piyush |date=2026-02-23 |title=IDFC First Bank appoints KPMG for forensic audit of ₹590 crore fraud |url=https://www.thehindubusinessline.com/money-and-banking/idfc-first-bank-appoints-kpmg-for-forensic-audit-of-590-crore-fraud/article70667343.ece |access-date=2026-02-24 |website=BusinessLine |language=en}}</ref>

As of 24 February 2026, AU Small Finance Bank denied any role in the fraud after the Haryana government removed it from its empanelled list on 18 February 2026.<ref name=":2">{{Cite web |last=Sarkar |first=Subhojit |date=2026-02-23 |title=AU Small Finance Bank denies wrongdoing after Haryana govt de-empanels it over alleged fraud |url=https://www.fortuneindia.com/business-news/au-small-finance-bank-denies-wrongdoing-after-haryana-govt-de-empanels-it-over-alleged-fraud/130632 |access-date=2026-02-24 |website=[[Fortune India]] |language=en}}</ref> However, the bank has initiated an internal review, placed certain employees on administrative leave pending the review.<ref name=":11" /><ref name=":0" /><ref name=":2" />

== References ==
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[[Category:Finance fraud]]
[[Category:Fraud in India]]
[[Category:Financial scandals]]

Haryana Government accounts fraud - Revision history

Ankitasharma at 10:31, 11 April 2026