IDFC First Bank Share Price Plummets 20% Amid Fraud
IDFC First Bank is currently facing a significant crisis as its share price dropped by 20% after revealing fraudulent transactions amounting to ₹590 crore at its Chandigarh branch. This unexpected disclosure has raised serious concerns about the bank's internal controls and its ability to safeguard customer funds. The share price fell to ₹66.85, marking the lowest level in eight months, as investors reacted to the news with selling pressure.
The issue came to light when the Haryana government requested the closure of its account with IDFC First Bank. This triggered a review of the account, revealing discrepancies between the requested amount and the actual balance. Following this alarming discovery, the bank was quick to inform the stock exchanges and the public, leading to a swift response from the state government.
In a decisive move, the Haryana government de-empanelled IDFC First Bank, along with AU Small Finance Bank, from handling government business. This means that no government funds will be deposited, invested, or transacted through these banks until further notice. The Finance Department has mandated all departments to transfer their funds and close accounts maintained with these banks immediately.
The impact of this scandal extends beyond immediate financial losses. IDFC First Bank's reputation is now at stake, as questions about its governance and compliance practices arise. The bank has suspended four employees pending investigation and has committed to taking strict disciplinary actions against anyone found involved in the fraudulent activities.
Additionally, the bank plans to hire an independent external agency to conduct a forensic audit. This move aims to provide a clearer picture of the extent of the fraud and to implement stronger internal controls to prevent such incidents in the future. A police complaint has also been filed, and the bank assures full cooperation with investigating agencies.
As a result of this scandal, investor confidence has been shaken, and the stock has been under pressure recently. Although the bank's shares were up by 24% over the past year, the current situation highlights the importance of strict oversight in financial institutions. It serves as a reminder of the potential risks involved in banking and the need for transparency to protect investors and the public.
