IDFC First Bank Share: Light recovery after heavy selling, know which action shook the banking system…

IDFC First Bank Share: Shares of IDFC First Bank rose in early trading on Tuesday. There was a huge fall in the stock on Monday after the fraud of ₹590 crore related to the accounts of some employees and Haryana government was revealed. The stock was trading at Rs 70.83, up almost 1% in early trading today. On Monday it closed down by about 16% and was at 20% intraday lower circuit. At the current level, the market capitalization of the bank is more than Rs 60,000 crore.

The bank has tried to assure investors that this incident is an isolated incident and the fraud was limited to a single branch in Chandigarh, which involved certain accounts of the Haryana government. This will not affect any system. The bank’s managing director and CEO, V Vaidyanathan, said it would impact the profit and loss account, but stressed that the bank had enough profit and liquidity to absorb the loss. After this confidence, the stock has become stable today.

On Monday, a brokerage assessment said the fraud could impact the bank’s pre-tax profit by about 20% for FY26. However, its impact on its net worth will be limited to about 1% only. UBS and Morgan Stanley described it as a manageable capital impact, while Jefferies said the main risk would be whether the issue spreads beyond the identified accounts.

Haryana government’s action

Haryana Government has de-empanelled IDFC First Bank and AU Small Finance Bank for government purposes with immediate effect. Banks said state government deposits are only about 0.5% of their total deposits. The immediate outflow of around Rs 200 crore is very less compared to their deposit base of over Rs 2.8 lakh crore.

IDFC First Bank action

IDFC First Bank has suspended four employees, informed regulators and auditors. A complaint has been lodged with the police. KPMG has been appointed to conduct an independent forensic audit. The bank has also initiated recovery measures, including recall requests and lien-marking of balances in doubtful beneficiary accounts in other banks.

On Monday, Reserve Bank of India Governor Sanjay Malhotra said that the central bank is closely monitoring the matter. He said that there is no systemic concern due to this fraud and the bank has good capital. Despite short-term headwinds, shares of IDFC First Bank have risen nearly 18% in the last year. The stock has performed better than the benchmark Nifty 50.