IDFC First Bank shares crash 20% to lower circuit after Rs 590 crore fraud disclosure

Shares of IDFC First Bank tumbled nearly 20 per cent on Monday after the private sector lender disclosed a Rs 590-crore fraud involving its employees and external parties in accounts linked to the Haryana government. The stock fell 19.99 per cent to Rs 66.85 on the BSE, hitting its lower circuit limit.

The development follows a decision by the Haryana government to de-empanel IDFC First Bank and AU Small Finance Bank from undertaking any government business in the state with immediate effect. The move came after alleged fraudulent opening and handling of government-linked accounts.

In a regulatory filing, IDFC First Bank said the fraud was the result of collusion between certain employees and external entities. Managing Director and CEO V Vaidyanathan stated that the bank would make necessary provisions in line with its policy of recognising financial stress upfront.

Meanwhile, shares of AU Small Finance Bank also declined, falling 7.62 per cent to an intra-day low of Rs 950.50. The Jaipur-based lender denied any wrongdoing and detailed transactions involving credits and transfers related to the government account in question.