IDFC First Bank Faces 20% Stock Plunge Post Fraud Disclosure

Shares of IDFC First Bank fell by 20% following the revelation of a Rs 590-crore fraud linked to Haryana government accounts. The fraud involved collusion of bank employees. As a result, both IDFC First Bank and AU Small Finance Bank were de-empanelled from Haryana government business.

Shares of IDFC First Bank nosedived by 20% on Monday in the wake of a Rs 590-crore fraud revealed by the bank, impacting accounts held by the Haryana government. The Bombay Stock Exchange recorded the stock closing at Rs 66.85, hitting its lower circuit limit.

This sharp decline followed the Haryana government's decision to de-empanel both IDFC First Bank and AU Small Finance Bank from handling any state business amid allegations of fraudulent account activities. Consequently, AU Small Finance Bank shares also dropped 7.62% during intra-day trading.

The fraudulent activities, according to V Vaidyanathan, Managing Director and CEO of IDFC First Bank, were facilitated by bank employees colluding with external actors. The bank is preparing to make necessary provisions to align with policies addressing financial stress.

(With inputs from agencies.)