IDFC First Bank Rs 590 fraud case: Is your money safe? What happens to FD, savings account deposits - Check details | EXPLAINED

IDFC First Bank Rs 590 fraud case: The private lender IDFC First Bank has revealed that some of its employees at the Chandigarh branch have conducted unauthorised transactions in the accounts of the Haryana government, leading to a difference of approximately Rs 590 crore. Cases like these tend to create apprehensions among customers regarding the security of their deposits in the bank. Can customers withdraw their money from the accounts, and if so, to what extent? Let us discuss the IDFC First Bank case, the bank’s stand on customer deposits, the RBI’s view on the issue, and the rights of consumers in relation to their deposits in banks.

What is IDFC First Bank Case?

IDFC First Bank, in a filing with the BSE, reported that a preliminary internal investigation, prompted by communication from a Haryana government department, revealed unauthorised and fraudulent activities by some employees at its Chandigarh branch. The bank reported that the case may also involve other persons, entities, or counterparties.

The bank reported that the problem arose when the Haryana government department asked the bank to close its account and transfer the money to another bank. During this process, some irregularities were noticed between the reported balance in the account and the actual amount of money in the account.

From February 18, 2026, onwards, other Haryana government entities approached the bank regarding their respective accounts. During these interactions, discrepancies were found between the actual account balances and the balances reported by the government entities.

The bank has clarified that the issue is limited to a specific group of Haryana government-linked accounts at the Chandigarh branch and does not affect other customers of that branch.

The Haryana government has de-empanelled IDFC First Bank and AU Small Finance Bank for conducting government business with immediate effect, pending further orders.

According to PTI, no government funds will be parked, deposited, invested, or transacted through these banks.

What’s the amount under reconciliation in the IDFC First Bank's case?

The total amount under reconciliation at the Chandigarh branch of IDFC First Bank is around Rs 590 crore. The bank has started an investigation and will try to recover the amount through legal and disciplinary actions.

What did RBI say about IDFC First Bank case?

Regarding the matter, RBI Governor Sanjay Malhotra, while addressing the same event as Finance Minister Nirmala Sitharaman, said, “We are monitoring the situation, but there is no systemic issue.”

What may happen to IDFC First Bank customers’ deposits?

Although IDFC First Bank has not issued any specific instructions regarding the deposits in its Chandigarh branch, it is worth noting that all bank deposits in India are insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, with some limitations and conditions.

According to the scheme, every depositor is insured up to Rs 5 lakh per bank, including both principal and interest amounts. This insurance covers fixed deposits (FDs), savings accounts, recurring deposits (RDs), and current accounts in case of bank failure, liquidation, or merger.

In cases such as the IDFC First Bank scenario, account holders and FD account holders will not lose their rights to claim their deposits up to the insured amount, and the bank is bound to protect them under the DICGC scheme.

Rights of account holders and FD investors in cases like IDFC First Bank

As per the Deposit Insurance and Credit Guarantee Corporation (DICGC), bank deposits are insured for a maximum amount of Rs 5 lakh per bank for the cumulative balance of savings accounts and FDs, including both principal and interest.

The deposits in multiple banks are insured separately for each bank. This gives a safeguarded protection, even if the returns differ.

The investors also have the Right to Information to check if their particular account is impacted. If a fraud relates to an unauthorised electronic transaction on a customer’s account, it has to be reported within three working days to ensure zero liability.