IDFC First Bank fraud bigger than last quarterly profit
IDFC First Bank's stock took a sharp 20% hit after a ₹590 crore fraud was uncovered at its Chandigarh branch.
The scam, allegedly carried out by certain employees and potentially other individuals/entities targeting Haryana government accounts, is actually bigger than the bank's last quarterly profit.
Impact on stakeholders
This fraud wipes out about 22% of the bank's expected yearly profit and dents its market value, which now stands at ₹57,486 crore.
The impact trickles down to mutual funds, insurers, government bodies, and regular investors who all hold stakes in the bank.
Bank's response to the crisis
The bank caught the scam during an account review and quickly suspended four employees.
Police complaints are filed, KPMG is on board for a forensic audit, and efforts are on to recover the money.
CEO V Vaidyanathan called it an "isolated" incident—the biggest single-day fall in the last six years—and says the bank expects it can absorb the loss.