IDFC Bank's ₹583 Cr Fraud Refund Boosts Shares 3%
IDFC First Bank's shares rose 3% after it swiftly refunded ₹583 crore (with interest) to Haryana govt accounts hit by a ₹590 crore employee fraud at its Chandigarh branch.
MARKET NEWS
2/24/20261 min read
After IDFC First Bank promptly paid ₹583 crore, including interest, to Haryana government ministries affected by a ₹590 crore employee scam at its Chandigarh office, the bank's shares increased by almost 3%. After a steep stock decline the day before, this payment, made despite an ongoing investigation, calmed market concerns.
Fraud Background
The scam was discovered in the Chandigarh office of IDFC First Bank, where certain staff members most likely conspired with other parties to transfer money from state-affiliated accounts in Haryana to other banks. It was discovered when a government agency found the balance was far lower than anticipated while attempting to cancel its account. The bank refers to it as an isolated event, suspends the employees implicated, and hires KPMG to conduct a forensic audit, which should be completed in four to five weeks.
Quick Payment Action
The bank gave the impacted departments ₹583 crore, or 100% of the claimed principal plus interest, within 24 hours of the investigation starting. Haryana Chief Minister Nayab Singh Saini praised the bank's prompt and customer-focused response while confirming receipt of the claimed figures of ₹556 crore, including ₹22 crore interest in certain statements. Authorities and the bank are now working together to find the scammers and get the money back.
Share Price Reaction
Due to fraud news, the stock fell more than 16% on Monday, wiping approximately ₹15,000–18,000 crore in market value before rising 3% to ₹72.27 intraday. Later, as investors praised the bank's proactive measures, it traded a little higher at about ₹70–72, indicating a partial recovery. The prompt reimbursement increases confidence, but analysts warn of possible profit losses if recovery is unsuccessful.
Bank's Stance
In order to safeguard public funds, IDFC First Bank prioritizes its "customer-first" ideals by making payments promptly. V Vaidyanathan, the CEO, promised that it would just affect this branch and that the bank would become stronger with improved governance. This action demonstrates their emphasis on ethics in the face of banking fraud issues in India.