Government of Haryana Constitutes Committee To Review IDFC Bank Fraud - Key Details

The Governor of Haryana has constituted a ‘High-Level Committee’ regarding unauthorized transfer of funds from IDFC First Bank and AU Small Finance Bank and to review the State Bank Policy.

This comes after the Mumbai-headquartered bank detected a Rs 590 crore fraud at its Chandigarh branch. However, Haryana Chief Minister Nayab Singh Saini noted, “Every single penny of the people of the state is safe, and the entire amount of approximately 556 crore rupees (which includes 22 crore rupees in interest as well) has already been returned within just 24 hours. This is the hard-earned money of Haryana's 2.80 crore people—no one can even cast an eye towards it.”

Meanwhile, the recently constituted committee is expected to examine "empanelment of IDFC First Bank and AU Small Finance Bank; decision taken by the concerned departments to deposit substantial Government funds in these banks; and issues relating to non-reconciliation by Government departments; Any lapses, procedural deficiencies, or systemic failures in this regard."

Further, it will examine the various provisions of the State's Banking Policy and its enforcement; assess compliance of the prescribed policy framework by department; Identify accountability, if any; and recommend appropriate corrective and preventive measures to ensure that such lapses do not recur.

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Earlier, MD and CEO of IDFC First Bank, V Vaidyanathan noted, "This matter pertains to a particular branch in Chandigarh and is confined to a limited set of Haryana government-linked accounts. The main issue which we have observed here is that certain employees of this branch, most possibly in connivance with external parties, have fraudulently transferred these amounts to beneficiaries who had accounts out— outside of our bank."

"We will spare no one. And we have quickly moved in. We have appointed a forensic auditor for this, KPMG. And we will expect them to move in with great diligence and move very fast. And we will take the full support of the law enforcement of the country," Vaidyanathan said.