Authors: Tapas Kumar Sahoo,Navajit Borah
Affiliation: Faculty of Management and Commerce, M.S. Ramaiah University of Applied Sciences, Bengaluru,Faculty of Management and Commerce, M.S. Ramaiah University of Applied Sciences, Bengaluru
Abstract:
The fraud in IDFC First Bank's Chandigarh Branch that was estimated to be worth about ₹590 crores in 2026 is an excellent example of both internal control failures and gaps in regulatory oversight in the banking industry in India. A key area of focus in this case study will be how internal bank employee allegedly worked with external parties to steal public money. The fraud involved the use of secondary data from credible sources (Indian Express, Reuters, Economic Times, Official Disclosure) to examine the structure, method of operation, and outcome of the fraudulent activities. Specifically, the method of operation of the fraud included the use of forged documents, unauthorized transactions and fund transfers using shell companies to hide the true nature of the fraud. In addition to examining the institutional response to the fraud by evaluating bank level responses, regulatory responses and law enforcement agency investigations; the study also uses two theoretical models of fraud (Fraud Triangle and Agency Theory) to evaluate the motivations behind the fraud and weaknesses in the system. Finally, the study provides several recommendations for improving policies to ensure that there are no future instances of fraud. The case illustrates the continued risks associated with financial systems even after technological advancements have been made and points out that structural changes are needed to handle public monies in private banking.
Keywords: Banking Frauds,governance failure,IDFC First Bank,financial frauds
Vol & Issue: VOL.1, ISSUE No.2, December 2025