The stock market can be highly sensitive to bad news, and today was a tough day for IDFC First Bank investors. On Monday, February 23, 2026, the IDFC First Bank share price witnessed a massive fall, crashing by 20% to hit its lower circuit limits. The sudden market panic was triggered by the bank’s shocking disclosure of a ₹590 crore fraud at one of its branches, involving government funds.
If you are wondering what exactly happened, how it affects the bank, and what the government is doing about it, here is a complete breakdown of the situation in simple words.
What Exactly Happened?
Over the weekend, IDFC First Bank informed the stock exchanges about a major financial irregularity detected at its Chandigarh branch. The issue involves unauthorized and fraudulent transactions worth approximately ₹590 crore.
These transactions were linked to accounts held by various departments of the Haryana government. According to the bank’s preliminary investigation, certain bank employees likely worked together with external individuals to clear forged cheques and fake authorization letters manually.
The bank realized something was wrong when a Haryana government department requested to close its account and move its funds to another bank. During this transfer, the government noticed a huge mismatch between the actual account balance and the amount that was supposed to be there.
Why is IDFC First Bank Share Falling Today?
Stock markets hate uncertainty, especially when it involves internal control failures at a major private bank. Following the fraud disclosure, heavy selling pressure gripped the stock as soon as the market opened on Monday.
The IDFC First Bank share tumbled by 20%, hitting an intraday low of ₹66.85 on the BSE. Millions of sell orders piled up, with almost no buyers willing to step in. Investors panicked because a fraud of this size raises serious questions about the bank’s risk management and operational safeguards. Furthermore, experts estimate that a loss of ₹590 crore could wipe out roughly 20% to 22% of the bank’s projected net profit for the financial year, which understandably spooked shareholders.
The Haryana Government’s Strict Action
The fallout from this incident was immediate and severe. The Haryana government took swift action to protect public funds. The state’s Finance Department issued a strict circular directing all government departments, boards, and state-run entities to stop doing business with IDFC First Bank and AU Small Finance Bank immediately.
The government has mandated that all its departments must now maintain banking relationships exclusively with public sector (nationalized) banks. Any state funds currently deposited in IDFC First Bank are being rapidly transferred out, and the accounts are being closed.
What Happens Next for the Bank?
IDFC First Bank is currently trying to control the damage and recover the stolen money. Here are the immediate steps the bank has taken:
Suspensions: The bank has suspended four officials suspected of being involved in the scam.
Police Action: A formal police complaint has been filed, and the bank is promising strict civil and criminal action against anyone involved.
Forensic Audit: The bank has appointed the global accounting firm KPMG to conduct an independent, deep-dive forensic audit to find out exactly how the system was bypassed.
Fund Recovery: Recall requests have been sent to the beneficiary banks where the stolen money was transferred, asking them to freeze those suspicious accounts.
While the bank’s management, including CEO V. Vaidyanathan, has assured the public that this is an isolated incident limited to just one branch, it will take time for the forensic audit to reveal the complete truth.
Should Investors Be Worried?
While the situation looks grim right now, it is important to look at the broader financial health of the bank. IDFC First Bank recently reported a strong 48% year-on-year growth in its net profit for the third quarter of FY26. The bank remains well-capitalized, and the management believes that while the ₹590 crore hit is significant, it is financially manageable.
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However, in the short term, the stock might remain highly volatile. Investors will be closely watching how much of the ₹590 crore the bank can actually recover and what the Reserve Bank of India (RBI) has to say about the internal control lapses.
Frequently Asked Questions (FAQs)
1. Why did the IDFC First Bank share hit the lower circuit today?
The share hit a 20% lower circuit because the bank disclosed a ₹590 crore fraud at its Chandigarh branch, causing extreme panic and massive sell-offs among investors.
2. Whose money was stolen in the IDFC First Bank fraud?
The fraudulent transactions were carried out in accounts belonging to various departments of the Haryana state government.
3. Has the Haryana government banned IDFC First Bank?
Yes, the Haryana government has removed IDFC First Bank from its list of approved banks. State departments have been ordered to close their accounts with the bank and move all public funds to nationalized banks.
4. Is the money of regular retail customers safe?
Yes. The bank has officially clarified that the fraud was isolated to a specific set of government-linked accounts at a single branch in Chandigarh. Regular retail customers are not affected by this incident.
How is the bank planning to recover the lost ₹590 crore?
The bank has asked the receiving banks to freeze the suspicious accounts where the money was transferred. They have also involved the police and appointed KPMG for a forensic audit to trace the funds.