IDFC First Bank's Stock Tumbles 20 pc After Rs 590-cr Fraud
The stock nosedived 19.99 per cent to Rs 66.85 -- also its lower circuit limit -- on the BSE
New Delhi: Shares of IDFC First Bank tumbled 20 per cent on Monday after the private sector lender disclosed a Rs 590-crore fraud committed by its employees and others in accounts held by the Haryana government. The stock nosedived 19.99 per cent to Rs 66.85 -- also its lower circuit limit -- on the BSE.
The move came after the Haryana government de-empanelled AU Small Finance Bank, along with IDFC First Bank, from undertaking any government business over alleged fraudulent opening of accounts.
In addition, shares of AU Small Finance Bank plunged 7.62 per cent to hit an intra-day low of Rs 950.50 apiece on the exchange.
IDFC First Bank on Sunday disclosed a Rs 590-crore fraud committed by its employees and others in accounts held by the Haryana government with the private sector lender.
According to a circular issued by the finance department of the Haryana government, "IDFC First Bank and AU Small Finance Bank are hereby de-empanelled for government business in Haryana with immediate effect till further orders."
AU Small Finance Bank has denied any wrongdoing in the matter.
In a filing late on Sunday evening, Jaipur-based AU Small Finance Bank said the government account in question was opened with an initial credit of Rs 25 crore transferred from a large private sector bank and additional credits of Rs 47 crore were subsequently received through multiple transactions from another private sector bank (IDFC First Bank).
Of the total credits received in the government account, Rs 47 crore were transferred to the customer account through 14 transactions, it said.
The Rs 590-crore fraud involving Haryana government accounts is the result of a collusion between employees of the IDFC Bank and external parties, its Managing Director and Chief Executive V Vaidyanathan said on Monday.
In a specially convened call for investors and analysts ahead of opening of the equity markets, Vaidyanathan said the bank will take some provisions as a result of the fraud and in line with its policies to recognise any stress upfront.