Shares of the lender rose to Rs. 72.24 was done. This came a day after the stock tumbled 16%, registering its worst single-day decline since March 2020, after the bank detected fraudulent activity by its employees at one of its branches in Chandigarh.
Here is what the Haryana Chief Minister had to say:
According to Saini, Rs. 556 crore, of which Rs. 22 crores including interest, were returned within 24 hours. Speaking in the Haryana Assembly, he said, “Nobody, be it a bank employee, a private individual or a government official, will be spared in this case.”
The chief minister added that four or five middle and lower level employees of the bank branch in Chandigarh conspired to carry out the operation.
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Saini promised strict action against any government official or employee involved in the alleged fraud. “We will constitute a high-level committee which will not only hold the officials and employees involved in the matter accountable but also make suggestions to prevent the situation as it has arisen in the future,” he added.
He assured the MLAs that Haryana’s financial management has been strengthened under the current administration and asserted that the finances of the state’s 2.8 crore citizens are due to be fully accounted for.
At IDFC First Bank branch around Rs. 590-crore fraud:
IDFC First Bank on Saturday said it has identified an alleged fraud by some employees at one of its branches in Chandigarh, involving accounts belonging to the Haryana government.
The lender suspended four suspect executives pending investigation. It said it would take strict disciplinary, civil and criminal action against employees and other external persons as per law. The bank also lodged a police complaint and sent a recall request to certain beneficiary banks for “lien mark balances in suspicious accounts held in these banks”.
In another exchange filing made public on Sunday, IDFC First Bank said it has appointed KPMG to launch an independent forensic audit into the matter.
What to expect for IDFC First Bank shares?
After the sharp surge seen in the stock prices at 2.40 pm, the stocks erased all the gains and were trading flat, as seen at 2.40 pm.
Motilal Oswal Financial Services said that at risk is Rs. 590 crore in deposits, the actual financial impact will depend on the quantum and timing of recovery as determined by the findings of the ongoing forensic audit and subsequent legal recovery process.
“We believe that in the worst-case scenario, assuming a modest recovery, the provisioning requirement will impact 4QFY26 PBT by 56%,” a domestic brokerage said.
Investec maintained ‘Buy’ rating but raised its target price to Rs. 105 to Rs. 92 did. It noted that the final impact would depend on the ongoing investigation, recovery and validation of claims.
Jefferies said IDFC First Bank will need to strengthen operational controls and clarify that the issue has not spread to other clients. Nomura’s Ankit Bihani said the impact on the bank’s financials depends on potential recoveries through liens marked on fraudulent beneficiary accounts maintained with other banks, liabilities of the entities involved in the transactions and the legal recovery process.
While citing concerns around governance and branch-level controls, Bihani said that given IDFC First Bank’s retail deposit-based model, the concept of reputation remains critical, and the stock may remain under pressure until forensic findings and financial impact are clearly established.
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