KPMG Investigation Concludes Chandigarh Branch Fraud at IDFC First Bank Was Isolated Incident

IDFC First Bank Finds 'Project Ultra' Fraud Was Isolated Incident

Mumbai, [Current Date] - Private sector lender IDFC First Bank has announced the findings of a forensic review by KPMG, which revealed that the ₹646 crore fraud uncovered at its Chandigarh branch earlier this year was an isolated incident involving collusion between branch employees, customer representatives, and third parties.

According to a stock exchange filing by the bank, the review, nicknamed 'Project Ultra', found that the modus operandi involved collusion between the branch employees, certain employees of the customers, and certain individuals external to the bank. To process the unauthorized transactions, potentially modified or edited authorization letters, cheques (including misuse of a few cheques) and approval emails were attached with transaction vouchers by the then branch staff, the report found.

In certain instances, signature inconsistencies were also observed. Subsequently, in certain instances non-existent Fixed Deposit Advices (FDA), edited interest certificates, and modified bank account statements were shared with the customers.

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The incident came to light in February when a Haryana government department sought to close its account and transfer the funds to another bank, only to find that the account balance differed from what the account owner believed it should be. The bank had previously disclosed that it was investigating whether the documents at the centre of the alleged fraud at its Chandigarh branch were genuine or forged.

The bank has confirmed that the net principal amount of around ₹646 crore quantified in the forensic report was in line with its previous disclosures. The bank has paid the aforesaid amount and applicable interest to the concerned departments and has recognised the same in the books of accounts in Q4FY26. The bank is a victim of this financial fraud and is working with investigative authorities.

The records in the Core Banking System (CBS) were accurate, and customers were provided monthly account statements reflecting their balances and transactions. Customers were also notified, where applicable as per process, through SMS alerts regarding transactions in their accounts.