Mumbai, Feb. 25 -- The suspected fraud at IDFC First Bank's Chandigarh branch, disclosed on 22 February, sent the lender's shares tumbling as much as 18% by 24 February. Even as the Reserve Bank of India (RBI) has assured there is no systemic risk and the Haryana government has de-empanelled the bank for fresh deposits, Mint examines what the episode means for the Warburg Pincus-backed lender.

IDFC First Bank disclosed on Sunday a suspected Rs.590-crore fraud at its Chandigarh branch, involving a set of Haryana government-linked accounts.

Certain branch employees, "most possibly in connivance with external parties", fraudulently transferred funds to beneficiaries holding accounts outside the bank, it said.

Managing director and chief e...