A family conspiracy or just a banking blunder?

Introduction

In February 2026, IDFC FIRST Bank’s Chandigarh branch became the center of a ₹590-crore fraud involving Haryana government funds. The fraud was uncovered when a state department sought to close its account and transfer balances; account statements from the bank showed large mismatches. In a regulatory filing, IDFC FIRST disclosed it had “detected a fraud of about ₹590 crore involving certain Haryana government-linked accounts” at that branch, the result of unauthorised and fraudulent activities carried out by some employees. The shortfall was eventually found to span multiple government accounts. State investigators and bank auditors say the scheme ran for months, using routine cheque-clearing processes to siphon funds out of the accounts. Once discrepancies emerged, the bank and Haryana authorities acted swiftly: IDFC FIRST set up a fraud-monitoring committee and engaged KPMG for a forensic audit, and the Haryana Anti-Corruption Bureau (ACB) launched a probe. By Feb 25, four suspects were in ACB custody, including two former IDFC branch staff and two relatives of one of them. Haryana’s Chief Minister Nayab Saini reported that approximately ₹556 crore (including ₹22 crore interest) of the money was recovered and returned to government coffers within 24 hours.

Maker-Checker Collapse 

Banks use a layered maker-checker system to prevent fraud: one employee (the “maker”) initiates a transaction and another independent employee (the “checker”) reviews and approves it. This dual-control “four-eyes” process is standard for large or government transactions. In theory, large cheque withdrawals from state accounts should have required multiple signoffs. In this case, however, investigators say bank staff colluded to bypass those controls. Cheques carrying forged signatures were processed without true verification. It was noted that although IDFC FIRST claimed to have excellent controls in place, those controls failed because of collusion between employees. In effect, fraudsters at the branch impersonated authorized signatories (including former officials) and manipulated the authorization workflow. It shows how a lapse in maker-checker checks can allow such theft: high-value cheques cleared by complicit staff would normally have tripped automated limits, but here all checks were unlawfully passed. In short, the system collapse occurred because the “checker” did not independently validate transactions, rendering the protective layer meaningless. With no fresh digital alerts or reconciliations in place, the fraudulent withdrawals went unnoticed until an external audit by the government triggered the alarm.

DK Behera’s Resignation and Suspicion

The scandal took on added complexity due to the involvement of Haryana’s former Panchayats Director, D.K. Behera. Behera, then Director General of Panchayats, relinquished his charge on Oct 28, 2025. The inquiry committee discovered that multiple cheques and debit notes were processed with his forged signature even after his resignation. For example, one cheque honoured by the bank had “Rs 2.50 crore” in figures but was written in words as “Rupees twenty-five crores” a discrepancy the bank cleared with Behera’s name on it. These findings prompted intense scrutiny of Behera’s tenure and departure. While Behera himself is not accused of wrongdoing, his name’s misuse raised questions about internal awareness of the fake transactions. When the fraud was detected, Behera’s office confirmed he had long since left, making the signature clearly forged. The panchayats committee’s report (filed in the FIR) flagged this forgery and procedural lapses as critical evidence. Speculation in media circles suggests investigators will probe whether anyone exploited Behera’s resignation for cover. Meanwhile, the misused signature has already underscored the glaring failure of authentication controls at the bank.

The ₹300 Crore Fund Trail and Swastik Desh Projects

Roughly ₹300 crore of the siphoned money was traced to a private firm called Swastik Desh Projects. Haryana ACB chief A.S. Chawla said this account, owned by the family of one of the accused, was a major conduit for the fraud. Swastik Desh is a partnership firm: Swati Singla (wife of ex-branch manager Abhay Kumar) holds a 75% stake and her brother Abhishek Singla holds 25%. Investigators say forged cheques from government accounts were credited to Swastik’s IDFC bank account. From there, money moved on to various entities: reports list jewelers Sawan Jewellers and Manik Jewellers, as well as family members of the suspects, as recipients of funds routed through Swastik. The payments linked to the Haryana Pollution Control Board and Panchkula Municipal Corporation were also funnelled through Swastik Desh. In short, the ₹300-cr trail suggests the scheme’s beneficiaries were interlinked: Swastik Desh (a firm tied to the conspirators) received funds from government schemes and then dispersed them to businesses and relatives. The ACB’s FIR explicitly names Swastik Desh and its role, and police are questioning the Singla family to unravel the full network. The exact path of all ₹300 crore is still under investigation, but official statements confirm the firm’s central role in accumulating the illicit money.

Close Geographies and Government Context

This fraud exploited geography and government networks. The IDFC FIRST branch is in Sector 32, Panchkula, on the Haryana–Chandigarh border. Nearby in Mohali (Punjab), an AU Small Finance Bank branch opened a sister account for the same housing scheme. All these locations - Chandigarh, Panchkula, Mohali - lie within a few kilometers of each other. The implicated scheme was Haryana’s Mukhyamantri Gramin Awas Yojana 2.0 (rural housing). Under MMGAY-2.0, the Development & Panchayats Dept had opened two accounts on Sept 26, 2025, ₹50 crore at IDFC FIRST and ₹25 crore at AU Small Finance Bank, which were supposed to be parked till needed. In January 2026, the department asked both banks to transfer the funds to Axis Bank. AU SFB complied (transferring ₹25.46 cr) but IDFC FIRST transferred only ₹1.27 crore before closing the account. This mismatch immediately aroused suspicion. The proximity of the banks and the government office in Panchkula appears to have facilitated quick and repeated transfers: cheques could be physically processed across the Haryana-Chandigarh-Punjab tri-junction without triggering jurisdictional alarms. Investigators note this was a “well-planned” misuse of local proximity, as reflected in how funds moved effortlessly between the trio of institutions. The MMGAY scheme’s context and multi-location scheme (state government, UT, private banks) thus underscores how the conspirators orchestrated a cross-border (state/UT) fraud within a tight geographic cluster.

Future Outlook (Road Ahead)

The immediate crisis is under control but many questions remain as the probe continues. In the coming weeks, IDFC FIRST Bank will await KPMG’s forensic audit report (expected in about a month). That report will likely detail exactly how controls failed and may identify any senior oversight gaps. Regulators and the bank have signaled plans to strengthen safeguards: according to the Indian Express, IDFC FIRST intends to implement a “system-based confirmation” for large branch transactions to mandate additional approvals. The Haryana government has convened a high-level committee led by the Finance Secretary to review the incident and recommend tighter procedures. In the political realm, opposition leaders are demanding a CBI probe, reflecting broader accountability pressures.

Looking ahead, depositors and the broader banking sector will watch this case closely. ACRB and RBI will reassess oversight of government-linked accounts across banks to prevent similar breaches. Some state departments have already moved funds out of IDFC FIRST (and AU SFB), impacting that bank’s deposits. However, as analysts note, Haryana’s government balances were only about 0.5% of IDFC FIRST’s deposits, so the flight (₹200–300 cr so far) should be manageable. Still, the bank must rebuild trust: its CEO has vowed to “win back the confidence” of government clients.

In conclusion, the ₹590-cr fraud is a landmark case highlighting operational vulnerabilities. The full ramifications will depend on KPMG’s findings, the criminal investigation’s progress, and whether any systemic changes are mandated. For now, investigators’ focus is on accountability (including possible charges against more bank or government staff) and complete recovery of diverted funds. The government may freeze and reclaim any remaining suspended funds still in bank accounts. The incident has already prompted banks to reexamine their cheque-clearing controls. In the broader landscape, this case underscores that “maker-checker” systems and insurance can mitigate but not eliminate the risk of insider collusion. The lessons from this probe are likely to influence banking governance and state fund management for years to come.

Sources

1. NDTV. (2026, February 24). IDFC bank fraud case, Haryana: Probe on, but “we have paid 100%”: IDFC FIRST Bank in ₹590 crore fraud case. https://www.ndtv.com/india-news/idfc-bank-fraud-case-haryana-probe-on-but-we-have-paid-100-idfc-first-bank-in-590-crore-fraud-case-11133225

2. ThePrint. (2026, February 25). Haryana govt employee arrested in ₹590 crore IDFC FIRST Bank fraud case. https://theprint.in/india/haryana-govt-employee-arrested-in-rs-590-crore-idfc-first-bank-fraud-case/2866933/

3. Finshots. (2026). A ₹590 crore fraud at IDFC FIRST Bank. https://finshots.in/archive/a-590-crore-fraud-at-idfc-first-bank/

4. The Indian Express. (2026, February 26). Explained: How the ₹590 crore fraud unfolded at IDFC Bank branch. https://indianexpress.com/article/explained/explained-economics/idfc-bank-590-crore-fraud-10547832/

5. The Tribune. (2026, February 26). IDFC FIRST Bank scam: Haryana probe points to forged cheques, debit notes. https://www.tribuneindia.com/news/haryana/idfc-first-bank-scam-haryana-probe-points-to-forged-cheques-debit-notes/

6. The Times of India. (2026, February 26). Massive ₹590 crore fraud rocks Haryana. https://timesofindia.indiatimes.com/city/chandigarh/massive-rs-590-crore-fraud-rocks-haryana-how-former-idfc-first-bank-officials-businesswoman-orchestrated-mmgay-2-0-scam/articleshow/128799422.cms

7. The Economic Times. (2026, February 25). IDFC FIRST Bank to get ₹35 crore relief under employee dishonesty cover. https://economictimes.indiatimes.com/industry/banking/finance/banking/idfc-first-bank-to-get-rs-35-cr-relief-under-employee-dishonesty-cover/articleshow/128724596.cms

8. The Economic Times. (2026, February 25). IDFC FIRST Bank fraud: ₹556 crore recovered, says Haryana CM. https://economictimes.indiatimes.com/industry/banking/finance/banking/idfc-first-bank-fraud-rs-556-crore-recovered-haryana-government-chief-minister-nayab-singh-saini/articleshow/128744731.cms

9. The Hindu. (2026, February 27). Staff collusion led to Haryana government account fraud: IDFC Bank. https://www.thehindu.com/business/Industry/staff-collusion-led-to-haryana-government-account-fraud-idfc-bank/article70666253.ece

10. BlinkX. (2026). ₹590 crore IDFC FIRST Bank fraud brings govt-banking partnerships into focus. https://blinkx.in/stories/590-crore-idfc-first-bank-fraud-brings-govt-banking-partnerships-into-focus-blinkx/

11. The Times of India. (2026, February 26). MCG shuts IDFC account, moves ₹108 crore to public sector bank. https://timesofindia.indiatimes.com/city/gurgaon/mcg-shuts-idfc-account-moves-s-108-crore-to-public-sector-bank/articleshow/128761386.cms

12. The Economic Times. (2026, February 25). Ex-branch manager, 3 more nabbed in ₹590 cr IDFC FIRST Bank case in Haryana.
    https://bfsi.economictimes.indiatimes.com/news/banking/ex-branch-manager-3-more-nabbed-in-rs-590-cr-idfc-first-bank-case-in-haryana/128776301

13. Sea and Job. (2026, February 26). ₹590 crore MMGAY 2.0 fraud rocks Haryana: Ex-bank officials, businesswoman held.
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14. JM Financial Services. (2026). IDFC FIRST Bank ₹590 crore Chandigarh fraud: Who’s at risk and should investors worry?
    https://www.jmfinancialservices.in/blogs-and-articles/idfc-first-bank-indian-rupee590-crore-chandigarh-fraud-whos-at-risk-and-should-investors-worry

15. The New Indian Express. (2026, February 23). Haryana govt removes IDFC FIRST Bank, AU Small Finance Bank from panel after fraud disclosure.
    https://www.newindianexpress.com/business/2026/Feb/23/haryana-govt-removes-idfc-first-bank-au-small-finance-bank-from-panel-after-fraud-disclosure

Authors
Aayush Agarwal
Suvam Srivastava