New Delhi [India], February 23 (ANI): The Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday said the Rs 590 crore fraud reported at one of the IDFC First Bank branches is not a systemic kind of issue, and the central bank is watching it.

While addressing the media, after the customary post-Budget meeting with finance minister, RBI governor on the issue said, 'As a policy, we do not comment on any individual bank or regulated entity. We are watching the development. There is no systemic kind of issue.'

IDFC FIRST Bank has suspended four employees after it discovered fraudulent activity involving approximately Rs 590 crore in certain Haryana government accounts at its Chandigarh branch, the bank said in its official stock exchange filing.

'The bank has launched an investigation, and plans to recover the funds through legal and disciplinary action. Based on the preliminary internal review conducted, the matter is confined to a specific group of government-linked accounts within Haryana Government operated through the said branch in Chandigarh and does not extend to other customers of the Chandigarh Branch,' it said.

'The aggregate amount under reconciliation across the identified accounts at the abovementioned Branch is approximately 590 crore. The impact may be determined based on receipt of further information, validation of claims, recoveries of any nature including those made through the process of marking lien on fraudulent beneficiary accounts maintained with other Banks, liabilities of other entities involved in the fraudulent transactions, and the legal recovery process,' IDFC FIRST Bank said.

'The Bank has taken the following actions: Four suspected officials have been placed under suspension pending investigation. The Bank will pursue strict disciplinary, civil and criminal action against the employees and other external individuals responsible, in accordance with applicable law,' the filing added.

Meanwhile, the Finance Department (Institutional Finance & Credit Control) of Haryana has de-empanelled IDFC First Bank and AU Small Finance Bank for government operations with immediate effect. The department has instructed all government departments, boards, corporations, and public sector undertakings to transfer funds from these banks to other authorised banks and close the accounts immediately, pending further notice. (ANI)