IDFC First Bank has launched an investigation into a suspected fraud of $65 million involving accounts of certain local government entities. The bank has informed the police and initiated internal action following the discovery of discrepancies.
In a regulatory filing to the stock exchange late Saturday, the Mumbai-based private lender said it detected discrepancies amounting to 5.9 billion rupees in accounts related to some entities of the Haryana state government in northern India.
The issue came to light when the government entities requested the closure of their accounts. The amounts claimed by the entities did not match the bank’s records, prompting further scrutiny.
The bank has suspended 4 employees from its Chandigarh branch pending investigation into the “incident involving unauthorized and fraudulent activities”. It also stated that an independent agency will be appointed to conduct a detailed probe. A police complaint has already been filed.
The Haryana state government and local police did not immediately respond to requests for comment.
IDFC First Bank, which received investments last year from Warburg Pincus and Abu Dhabi Investment Authority, reported a quarterly profit of $55.46 million in its latest financial results.
The bank said it is taking necessary steps to investigate the matter and address the discrepancies.
($1 = 90.7010 Indian rupees)
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