IDFC First Bank shares were among the worst performers on Dalal Street on Monday afternoon, plunging nearly 16 per cent to ₹70.26 on the NSE after the lender disclosed unauthorised and fraudulent activities at its Chandigarh branch involving Haryana government accounts worth approximately ₹590 crore.
The bank, in a regulatory filing dated February 21, 2026, said discrepancies were noticed when a Haryana government department sought closure of its account and transfer of funds. Subsequent engagement with other Haryana government entities from February 18 revealed further differences between actual account balances and balances claimed by these entities. The matter is currently confined to a specific set of government-linked accounts at the Chandigarh branch and does not affect other customers of that branch.
Four employees have been suspended pending investigation. The bank has filed a police complaint, informed its regulator, and on February 22 announced the appointment of KPMG to conduct an independent forensic audit. The Audit Committee and Board of Directors were convened on February 21 to review the matter.
AU Small Finance Bank was the second major casualty, falling 6.6 per cent to ₹961.65. The bank issued a clarification stating it received communications from a Haryana government department on February 16 and February 18 regarding account details and suspected unauthorised transactions. The Haryana Finance Department de-empanelled AU Bank for government business on February 18. The bank stated that all 14 transactions from the government account to a customer account — totalling approximately ₹47 crore — were duly authorised by the concerned government department. As of February 21, the bank’s Haryana government deposits had reduced to approximately ₹538 crore from ₹735 crore on February 17, representing roughly 0.4 per cent of the bank’s total deposits.
Despite the sharp declines in these two counters, the broader Bank Nifty index remained relatively resilient, trading at 61,114.85, down a marginal 0.09 per cent intraday. Ten of the 14 Bank Nifty constituents were trading in the green, with Kotak Bank, Axis Bank and Union Bank posting gains of over 1.5 per cent. The index continues to trade above all key exponential moving averages, and technicals suggest support in the 60,600–60,900 range remains intact.
The IDFC First Bank fraud disclosure has raised questions among investors about internal controls at mid-sized private lenders, though analysts note the broader banking index’s resilience suggests the market is treating the incident as company-specific rather than a systemic concern.
Published on February 23, 2026