IDFC was incorporated on 30 January 1997 with its registered office in Chennai and started operations on 9 June 1997. In 1998 the company registered with the Reserve Bank of India (RBI) as a non-banking financial company and in 1999 it formally became a Public Financial Institution.
To conform with RBI guidelines IDFC founded a non-operative financial holding company (NOFHC) in 2014 to manage its five subsidiaries IDFC Bank, IDFC MF, IDFC Alternatives, IDFC IDF & IDFC Securities. IDFC is the holding company for NOFHC IDFC Projects Ltd and IDFC Foundation. IDFC Bank started operations with 23 branches in Madhya pradesh , Delhi, Mumbai, Hyderabad, Bengaluru, Pune, Chennai, Ahmedabad and Kolkata. 15 branches are in settlements with a population of less than 10,000.

Prime Minister Narendra Modi formally inaugurated IDFC Bank on 19 October 2015. IDFC Bank Ltd. (Infrastructure Development Finance Company) is an Indian banking company with headquarters in Mumbaithat forms part of IDFC, an integrated infrastructure finance company.

IDFC received a universal banking licence from the Reserve Bank of India (RBI) in July 2015. On 6th November, 2015, IDFC Bank was listed on BSE and NSE. The bank serves corporate and private customers in India including the infrastructure sector that IDFC specialized in from its founding in 1997. The bank also aims to provide services to people in rural areas and to the self-employed. The bank IDFC Bank is the first in India to launch aadhaar-linked cashless merchant solution. One of it's largest loans into e-commerce includes a 300 crore rupees one to Flipkart.