India, Feb. 27 -- Private lender IDFC First Bank has disclosed an alleged fraud of Rs. 590 crore at its Chandigarh branch involving accounts of the Haryana Government, prompting swift action from the state's Finance Department, including the immediate delisting of two private banks from government business.

In a communication to the National Stock Exchange of India and the Bombay Stock Exchange, the bank said it had identified an aggregate amount of Rs. 590 crore "under reconciliation" across certain accounts at the branch. The discrepancy came to light after the state's Development and Panchayats Department sought closure of its accounts and transfer of funds to another bank, following which a mismatch was detected between the account b...