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News Topical, Digital Desk : IDFC First Bank shares saw a slight recovery on Tuesday (February 24) after a significant decline due to a ₹590 crore fraud case. Following heavy selling on Monday, the bank's stock rose about 1% in early trade to trade at approximately ₹70.83. The stock had closed down nearly 16% a day earlier and lost as much as 20% intraday.
The bank has now assured investors that this fraud was an isolated incident and limited to a few accounts belonging to the Haryana government at a branch in Chandigarh. V. Vaidyanathan, MD and CEO of the bank, stated that while the incident will impact the bank's profits, the bank has sufficient capital and liquidity to absorb the losses.
What did the brokerage firms say? Brokerage firms UBS, Morgan Stanley, and Jefferies also stated in their initial assessment that the impact on capital could be limited. Reports suggest that this loss could be around 20% of FY26 profit before tax, but the impact on net worth will be around 1%.
Haryana Government Takes Action As a precautionary measure, the Haryana government has temporarily removed IDFC First Bank and AU Small Finance Bank from government banking operations. According to the bank, state government deposits represent only 0.5% of total deposits, so the withdrawal of approximately ₹200 crore will not have a major impact. The bank has suspended four employees, filed a police complaint, and appointed KPMG for a forensic investigation. The process of recovering funds from suspicious accounts has also been initiated.
RBI is monitoring the entire matter. The Reserve Bank of India has stated that it is monitoring the entire matter and that there are currently no major concerns regarding the banking system. Although the fraud news has put pressure on the stock, the bank's stock has still shown a gain of around 18% in the last one year.
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