RBI Monitors IDFC First Bank Fraud: Rs 590 Crore Scandal

The Reserve Bank of India is closely monitoring a Rs 590 crore fraud at IDFC First Bank's Chandigarh branch. The incident led to employee suspensions and government action. Despite the situation, the RBI asserts no systemic risk, focusing on a contained investigation and legal recovery process.

The Reserve Bank of India (RBI), led by Governor Sanjay Malhotra, is vigilantly observing the unfolding Rs 590 crore fraud case at IDFC First Bank's branch in Chandigarh. While addressing reporters post-Budget meeting, Malhotra stressed the issue is not indicative of a systemic banking problem.

IDFC FIRST Bank has suspended four employees in connection with the fraudulent activity, which affected specific Haryana government accounts. According to the bank's official statement, a thorough investigation has been launched, with efforts underway to recover the funds through legal and disciplinary measures.

The bank reports that the fraudulent activity is contained to particular government-linked accounts at the branch, with no impact on remaining clients. In response, Haryana's Finance Department has de-empanelled IDFC First Bank and AU Small Finance Bank, redirecting government transactions to other authorized banks.