Top 5 Single Day Declines for IDFC First Bank Stocks:
After all, today’s 16% decline is the worst single-day decline for IDFC First Bank shares in almost six years. Earlier on March 12, 2020, the company’s shares fell 17% to close at Rs 27.60 per piece.The stock suffered a significant decline that month at the onset of the COVID-19 pandemic, falling another 13% on March 19, 12% on March 23, and almost 11% on March 16, 2020. Later on February 24, 2022, the bank’s shares fell by more than 10%.
Why Did IDFC First Bank Shares Crash Today?
IDFC First Bank on Saturday said it has identified an incident of alleged fraud by some employees of one of its branches in Chandigarh, involving accounts linked to the Haryana government. The lender had received a request from one of the departments of the Haryana government to close its account and transfer money to another bank. When assessing the request, some discrepancies were found in the amount stated compared to the balance on the account.
The bench added that since February 18 this year, certain other entities of the state government have been dealing with their respective accounts. “During this process, discrepancies were observed between the balances in the account and the balances stated by the said Haryana government entities maintaining accounts with the Bank,” it added.
According to the bank, the total amount to be reconciled against these accounts at the branch is approximately Rs 590 crore. “The impact may be determined based on the receipt of further information, the validation of claims, recoveries of any kind, including those made through the process of establishing liens on fraudulent beneficiary accounts held in other banks, liabilities of other entities involved in the fraudulent transactions, and the legal recovery process,” it added.
Also read | IDFC First Bank fraud: How a Rs 590 crore hit wiped out Rs 14,000 crore of investor wealth IDFC First Bank has suspended four suspected officials pending investigation. It said it will take strict disciplinary, civil and criminal action against the employees and other outside persons, according to the law. The bank has also filed a police complaint and sent a recall notice to certain beneficiary banks to “seize the balance of suspect accounts in these banks.”
IDFC First Bank appoints independent forensic auditor:
It said that based on the preliminary internal investigation, the incident has been narrowed down to a specific group of government-linked accounts operating through the said branch. It added that it does not apply to the branch’s other customers.
In another exchange filing released on Sunday, IDFC First Bank said it has appointed KPMG to initiate an independent forensic audit into the matter.
RBI finds no systemic risk:
The Reserve Bank of India (RBI) today said it does not see any systemic risk arising from the IDFC First Bank fraud case. At a joint press conference along with Finance Minister Nirmala Sitharaman, Central Bank Governor Sanjay Malhotra said, “We are monitoring the development, there is no systemic problem.”
The stock closed as the biggest loser on the Nifty Bank index, which itself closed in the green. The index ended the session 0.15% higher at 61,264.25, with shares of Kotak Mahindra Bank posting the biggest gains.
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