IDFC First Bank Shares Plunge 19% Following Disclosure of Employee-Driven Rs 590-Crore Fraud

IDFC First Bank Faces 19% Share Price Decline Following Rs 590-Crore Fraud Disclosure

On February 23, IDFC First Bank shares plummeted by nearly 19% to Rs 68 apiece, following the lender's disclosure of a Rs 590-crore fraud committed by its employees and others in accounts held by the Haryana government.

IDFC First Bank has reported the matter to the banking regulator and filed a police complaint. The bank's net worth is approximately Rs 6,300 crore, with the amount under reconciliation equivalent to roughly 0.9% of its net worth. Brokerage estimates suggest that the suspected amount is about 20% of the bank's fiscal 2026 pre-tax profit.

UBS, Morgan Stanley, and Jefferies have estimated the potential hit to fiscal 2026 profit before tax at around 20%, 22%, and 20%, respectively. Jefferies noted that the lender will need to reassure investors that the issue has not spread to other clients and that the matter does not appear to be systemic.

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IDFC First Bank has assured that the fraud is confined to a specific group of government-linked accounts within the Haryana government, operated through a branch in Chandigarh. The bank has placed four officials under suspension pending investigation and has assured strict disciplinary, civil, and criminal action against the employees and other external individuals responsible.

The Haryana government has de-empanelled IDFC First Bank and AU Small Finance Bank for government business with immediate effect, pending further orders. The bank has initiated a reconciliation exercise to determine the final amount of the fraud and has appointed an independent external agency to conduct a forensic audit.

Key Figures:

• Rs 590 crore: Amount of the fraud
• 19%: Share price decline of IDFC First Bank on February 23
• Rs 68: Price of IDFC First Bank shares on February 23
• 0.9%: Amount under reconciliation as a percentage of IDFC First Bank's net worth
• 20%: Estimated potential hit to fiscal 2026 pre-tax profit
• Rs 6,300 crore: IDFC First Bank's net worth
• February 20: Date when IDFC First Bank placed the matter before a Special Committee of the Board
• December 31, 2025: Date when IDFC First Bank reported a 24% jump in deposits and a 48% rise in net profit

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