Market Brief: Banking Sector Oversight The Haryana state government has officially de-empanelled **IDFC First Bank** following the discovery of a suspected **₹590 crore** fraud. The discrepancy involves specific government-linked accounts managed at a Chandigarh branch. Investigation and Governance Chief Minister Nayab Singh Saini confirmed that a **First Information Report (FIR)** has been registered. The state's **Anti-Corruption Bureau (ACB)** and the **Vigilance Department** are leading a comprehensive probe. A high-level committee of IAS officers has also been formed to pinpoint accountability. Internal bank reviews suggest the fraud stemmed from employee collusion with external parties. In response, the bank has: * Suspended **four** branch officials. * Appointed **KPMG** to conduct an independent forensic audit. * Initiated legal recovery by lien-marking beneficiary accounts in other banks. Market Impact and Financials The disclosure triggered a significant sell-off in **IDFC First Bank** shares, which plummeted **20%** on Monday, February 23, 2026. This crash wiped out over **₹14,000 crore** in investor wealth. The stock hit an 8-month low of **₹66.85** during the session. As of February 24, 2026, the share price is attempting to stabilize near **₹70.00**. The reported fraud amount of **₹590 crore** notably exceeds the bank's **Q3 FY26 net profit** of **₹503 crore**. Analysts at UBS and Morgan Stanley estimate the incident could impact projected **FY26 profits** by approximately **20% to 22%**. Regulatory Outlook RBI Governor Sanjay Malhotra addressed the situation, stating there is **no systemic risk** to the broader Indian banking sector. The central bank characterizes the event as an isolated governance lapse rather than a structural failure. Management maintains that the bank remains well-capitalized with a **Capital Adequacy Ratio** of **16.22%**. The total impact is estimated at roughly **1%** of the bank's net worth. Departments across Haryana have been instructed to immediately transfer all public funds from IDFC First Bank and **AU Small Finance Bank** to other authorized institutions. The investigation is expected to conclude within four to five weeks.