The Reserve Bank of India (RBI) is maintaining a vigilant watch over a **₹590 crore** fraud reported by IDFC First Bank at its Chandigarh branch. The incident, disclosed on February 22, 2026, involved discrepancies in accounts belonging to certain Haryana government entities. Governor Sanjay Malhotra has clarified that the case is an isolated incident resulting from internal collusion and does not pose a systemic risk to the Indian banking sector. The bank has already suspended **4 officials** and engaged KPMG for a forensic audit to determine the full extent of the impact, which could reach up to **₹1,000 crore** according to preliminary probe details. Despite this disruption, the RBI maintains that the broader financial system remains resilient. The banking regulator continues to focus on macroeconomic stability, recently holding the repo rate steady at **5.25%** during the February 2026 policy meeting. The central bank has updated its retail inflation projections for the 2025–26 financial year. Headline CPI inflation is now projected at **2.1%** for the full year, though it is expected to firm up to **3.2%** in the current January–March quarter (Q4). Looking ahead, the RBI anticipates inflation to normalize toward **4%** and **4.2%** in the first two quarters of the next fiscal year. Liquidity management remains a high priority as the RBI transitions to stricter funding rules. Starting April 1, 2026, new norms will require banks to provide credit to capital market intermediaries only on a **100%** collateralized basis. This shift is designed to reduce leverage and protect the system from volatility. The RBI is actively using variable rate repos and open market operations to ensure smooth credit flow. While these measures may lead to a temporary tightening of short-term liquidity, the regulator views them as essential for long-term financial discipline. Market analysts note that while the IDFC First Bank incident caused a sharp **15–20%** intraday drop in its share price, the bank’s capital adequacy remains strong. The potential financial hit is estimated at approximately **1%** of the bank's net worth, ensuring that the lender's operational capacity remains intact.