RBI Says No Systemic Risk In IDFC First Bank Fraud
IDFC First Bank has disclosed a suspected ₹590 crore fraud linked to government-related accounts, triggering a sharp fall in its share price and prompting an RBI review. The Reserve Bank of India said the incident does not pose a systemic risk to the wider banking sector and is being closely monitored. An independent forensic audit has been ordered.
RBI Says No Systemic Risk In ₹590 Crore Fraud
Reserve Bank of India Governor Sanjay Malhotra stated that the central bank is watching developments around the suspected ₹590 crore fraud at IDFC First Bank but sees no systemic issue in the banking system. He emphasised that the fraud appears to be contained to specific accounts and does not threaten broader financial stability.
The RBI’s assurance aims to calm market concerns after the incident emerged. The central bank is maintaining oversight as investigations continue.
IDFC First Bank Share Price Falls On Fraud Disclosure
IDFC First Bank’s shares plunged sharply following the disclosure of the suspected financial irregularity, with the stock ending significantly lower in trading. The decline marked one of the steepest drops for the bank in recent sessions, reflecting investor concern over the impact of the fraud on future earnings and confidence.
The suspected fraud was uncovered during internal reconciliations of accounts linked to the Haryana government at the bank’s Chandigarh branch. The scale of the discrepancy drew attention as it exceeded the lender’s recent quarterly profit.
Bank Response And Forensic Audit Launched
In response to the fraud revelation, IDFC First Bank has suspended the officials implicated and filed a police complaint. The bank has appointed KPMG to conduct an independent forensic audit expected to take several weeks, and it has said strong liquidity buffers and profitability metrics should help absorb the financial impact.
Despite the setback, the lender has reiterated that it expects to remain fundamentally stable. The outcome of the audit and subsequent regulatory actions will be closely watched by investors and industry observers.
