IDFC First Bank Shares Hit 20% Lower Circuit After ₹590 Crore Haryana Government Fraud Disclosure

IDFC First Bank Stock Crashes Following Fraud Revelation​

New Delhi, February 23: Shares of IDFC First Bank plunged by 20 percent on Monday after the lender disclosed a ₹590 crore fraud involving accounts linked to the Haryana government.

The stock tumbled 19.99 percent to ₹66.85 on the BSE, hitting its lower circuit limit as investors reacted sharply to the development.

The disclosure came a day after the bank informed exchanges that the fraud had been committed by its employees and others in accounts held by the Haryana government.

Haryana Government De-Empanels Two Banks​

In response to the alleged fraudulent opening of accounts, the Haryana government de-empaneled both IDFC First Bank and AU Small Finance Bank from undertaking any government business in the state.

According to a circular issued by the state’s finance department, both banks have been de-empaneled with immediate effect until further orders.

Shares of AU Small Finance Bank also came under pressure, falling 7.62 percent to an intra-day low of ₹950.50 on the exchange.

AU Small Finance Bank Denies Wrongdoing​

Jaipur-based AU Small Finance Bank denied any wrongdoing in the matter.

In a regulatory filing late Sunday evening, the bank stated that the government account in question was opened with an initial credit of ₹25 crore transferred from a large private sector bank. It further received additional credits of ₹47 crore through multiple transactions from another private sector bank, identified as IDFC First Bank.

Out of the total credits received, ₹47 crore was transferred to a customer account through 14 transactions, the bank said.

IDFC First Bank CEO Acknowledges Collusion, Provisioning Planned​

Managing Director and Chief Executive V Vaidyanathan said on Monday that the ₹590 crore fraud involving Haryana government accounts resulted from collusion between employees of the bank and external parties.

Speaking during a specially convened call with investors and analysts ahead of market opening, he stated that the bank would make provisions in line with its policy of recognizing stress upfront.

The disclosure has triggered sharp volatility in banking stocks, with investors closely tracking further developments related to the investigation and financial impact.