IDFC First Bank share price today: Stock opens flat a day after 16% slump on Rs 590 crore fraud – The Times of India

IDFC First Bank share price today (AI image)

IDFC First Bank share price today: IDFC First Bank stock opened in green on Tuesday a day after its shares recorded the worst crash since March 2020. At 9:18 AM, IDFC First Bank shares were trading at Rs 70.37, up 0.47%. The steep fall came on IDFC First Bank admitting to a Rs 590 crore fraud at its Chandigarh branch related to Haryana government accounts.IDFC First Bank on Monday said it expects to stay profitable despite a Rs 590-crore impact from fraudulent transactions involving Haryana government-linked accounts, even as its shares fell 16% during the day.Addressing analysts on a conference call, Managing Director and CEO V Vaidyanathan said the irregularities were traced to employee collusion at the bank’s Chandigarh branch. He said that KPMG has been appointed to conduct a forensic audit and noted that the bank has employee dishonesty insurance coverage of up to Rs 35 crore. According to officials, the fraud stemmed from forged cheques that were cleared at the branch.“This is a specific isolated incident that happened in one branch with one client group,” Vaidyanathan said, adding that it is confined to “a particular branch in Chandigarh and is confined to a limited set of Haryana govt-linked accounts.”He ruled out any digital compromise, saying that the episode involved physical cheque manipulation. “This is a physical transaction where the cheques have been forged. This is the oldest kind of fraud probably known to banking,” he said. “This looks to us on the basis of the work we’ve done clearly a case of employee fraud,” he added, noting that funds were transferred to beneficiary accounts outside the bank.Vaidyanathan said established safeguards such as maker-checker-authoriser controls, positive pay systems for cheques, scrutiny of high-value instruments, SMS alerts and monthly account statements were in place. However, he acknowledged that collusion among employees allowed the fraud to bypass these checks. “The issue in this case is that many of these people connived in making it happen.” The bank has decided to introduce pre-approval requirements for clearing all high-value cheques.In the Haryana Assembly, Chief Minister Nayab Singh Saini said on Monday that the funds involved in the IDFC First Bank Rs 590-crore fraud case will “definitely come back” and assured that appropriate action will be taken against those responsible.IDFC First Bank has suspended staff suspected of involvement. Vaidyanathan said KPMG’s forensic audit is expected to take “four to five weeks to conclude.”(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)