IDFC First Bank's Shares Plunge 20% Following Rs 590 Crore Fraud Revelation
Synopsis
In a shocking turn of events, IDFC First Bank's shares fell by 20% after a fraud of Rs 590 crore was discovered, allegedly involving its employees. The bank has taken swift action by suspending officials and informing regulatory authorities.
Key Takeaways
IDFC First Bank shares fell 20% due to a Rs 590 crore fraud revelation.
Four employees have been suspended pending investigation.
The fraud is approximately 0.9% of the bank's net worth.
The Haryana government has de-empaneled the bank for further business.
All reconciliations must be completed by March 31, 2026 .
Mumbai, February 23 (NationPress) - The shares of IDFC First Bank plummeted to the 20 percent lower circuit limit on Monday after the bank disclosed that it had uncovered fraudulent transactions totaling approximately Rs 590 crore, reportedly perpetrated by employees at its Chandigarh branch.
The stock reached an intra-day low of Rs 66.85, marking a 20 percent decline. Initially, the shares opened 10 percent lower and then further increased their losses. By 10:33 AM, the shares were trading at Rs 70.10, reflecting a drop of 16.06 percent for the day.
The bank clarified that these issues are specific to a group of accounts linked to the Haryana government at the Chandigarh branch. They have notified regulators and lodged a police complaint, while also suspending four officials pending an investigation.
The stock exchange filing from the bank stated, "On a preliminary basis, unauthorized and fraudulent actions have been carried out by certain employees at a specific branch in Chandigarh, particularly involving a designated set of Haryana state government accounts, potentially implicating other individuals or entities."
Estimates from independent brokerage firms indicate that the alleged fraud represents about 0.9 percent of the bank's net worth and 20 percent of its projected pre-tax profit for FY26.
In response, the Haryana government has removed IDFC First Bank and AU Small Finance Bank from its list of approved banks for government transactions, effective immediately until further notice, according to an official circular.
All departments, boards, corporations, and public sector undertakings have been instructed to cease using these banks for deposits, investments, or any financial dealings.
Authorities have also been directed to promptly transfer existing funds and close any accounts held with the two banks.
The Finance Department highlighted failures in adhering to fixed deposit guidelines, pointing out instances where funds intended for flexible or higher-interest fixed deposit schemes were kept in savings accounts, resulting in diminished returns and financial losses for the state.
Departments have been mandated to strictly comply with approved deposit terms, conduct regular verifications of bank compliance, perform monthly reconciliations, and report any irregularities.
All reconciliations are to be finalized by March 31, 2026, with a certified compliance report due by April 4, 2026.
Point of View
As financial institutions must maintain public trust and meet regulatory expectations.
NationPress
20 Jun 2026
Frequently Asked Questions
What caused the decline in IDFC First Bank's shares?
The shares fell after the bank reported fraudulent transactions amounting to Rs 590 crore, allegedly involving its employees.
What actions has IDFC First Bank taken in response to the fraud?
The bank has suspended four officials, informed regulatory authorities, and filed a police complaint regarding the fraudulent activities.
How significant is the reported fraud compared to the bank's overall financial health?
The suspected fraud is estimated to be about 0.9% of the bank's net worth and 20% of its projected pre-tax profit for FY26.
What measures has the Haryana government implemented regarding IDFC First Bank?
The Haryana government has removed IDFC First Bank from its list of approved banks for government business until further notice.
What compliance actions are expected from the bank's departments?
Departments are instructed to ensure adherence to approved deposit terms, conduct verifications, and complete reconciliations by specified deadlines.
