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IDFC FIRST Bank shares fall sharply

IDFC First Bank Shares: IDFC First Bank Limited shares are in a bad shape today. On Monday, February 23, the bank's shares hit a 15% lower circuit. The major reason for the decline is a fraud of ₹590 crore. 

The Mumbai-based private bank informed the exchange on Sunday that a department of the Haryana government had asked it to close one of its accounts at its Chandigarh branch and transfer the funds to another bank account. During this process, when the bank reconciled the accounts, it discovered that the actual balance in the account was significantly less than the department's stated balance. Initial investigations revealed a discrepancy of approximately ₹590 crore (approximately ₹590 crore) in several accounts linked to the Haryana government.

Now the question arises: who misappropriated such a large sum of money? The bank claims this is an internal fraud. Some employees, in collusion with outsiders, unethically withdrew or transferred funds from the account. The matter is currently under investigation, and the bank has immediately suspended four employees pending the completion of the investigation. The government has also taken a strong stance on this incident.

The Haryana government has ordered all its departments to withdraw all their funds from IDFC First Bank and AU Small Finance Bank and deposit them in other government banks. Meanwhile, a relief for ordinary customers is that this fraud will not affect the public's savings accounts or fixed deposits. The bank has stated that this fraud is limited to specific accounts of the Haryana government.

Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Monday that the bank is monitoring developments related to the Rs 590 crore fraud at IDFC First Bank and there is no systemic issue. "We are monitoring developments; there is no systemic issue," he told reporters at a press conference held after Finance Minister Nirmala Sitharaman's customary address to the RBI's central board of directors after the Union Budget.

Earlier, IDFC First Bank Managing Director and Chief Executive Officer (CEO) V. Vaidyanathan said on Monday that the ₹590 crore fraud involving Haryana government accounts was perpetrated through collusion between bank employees and outside parties. The issue is limited to a single entity and a single customer group. It is not a case of a systemic reporting error.