Mumbai: IDFC FIRST Bank on Sunday said it has appointed KPMG to conduct an independent forensic audit into the suspected ₹590-crore fraud at its Chandigarh branch.
The appointment comes days after the private sector lender disclosed unauthorized and potentially fraudulent activities involving certain employees at a specific branch in Chandigarh, pertaining to a group of Haryana government-linked accounts.
In a regulatory filing under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, the bank said the forensic audit engagement is in furtherance of its February 21 disclosure, where it had indicated plans to appoint an external agency.
Strengthening independent oversight
The decision to bring in KPMG signals a move toward independent validation of the bank’s internal findings and reconciliation exercise. The lender had earlier said that the aggregate amount under reconciliation across the identified accounts stands at approximately ₹590 crore, though the final financial impact will depend on claim validation and recovery proceedings.
The matter surfaced after discrepancies were observed in account balances linked to certain Haryana government departments. Four employees have been placed under suspension pending investigation, and complaints have been filed with law enforcement authorities.
The bank has also informed its regulator and statutory auditors and convened meetings of its Special Committee for Monitoring and Follow-up of Cases of Frauds, Audit Committee, and Board of Directors.
Focus on recovery and accountability
IDFC FIRST Bank has initiated steps including lien marking requests on suspicious beneficiary accounts maintained with other banks and is cooperating with investigative agencies.
The independent forensic audit by KPMG is expected to examine transaction trails, internal control systems, authorization processes, and potential collusion, if any, with external entities.
The lender reiterated that it is complying with regulatory requirements and has uploaded the disclosure on its website. The findings of the forensic audit will likely play a key role in determining the eventual financial impact and accountability in one of the largest recent fraud disclosures involving a private sector bank’s branch-level operations.