The shares of the IDFC First Bank saw a major slump on Monday after the lender revealed a suspected fraud case at one of its branches. Fraud Scheme In a regulatory filing dated February 21, the Mumbai-based bank alleged that certain employees at its Chandigarh branch were involved in a fraudulent scheme involving ₹590 crore from accounts associated with the Haryana state government. Four officials of the branch are already suspended pending the outcome of the internal investigation. “The impact may be determined based on receipt of further information, validation of claims, recoveries of any nature including those made through the process of marking lien on fraudulent beneficiary accounts maintained with other Banks, liabilities of other entities involved in the fraudulent transactions, and the legal recovery process,” the bank said . The bank is in the process of appointing an independent external agency to conduct a probe of the incident. It has also filed a complaint with police authorities and sent requests to certain beneficiary banks to lien mark, or essentially freeze, the balance in suspicious accounts. Discrepancies The bank uncovered the alleged illicit activity after a particular department of the Haryana government asked to close its account and transfer the funds to another bank. During this process, IDFC First Bank noticed that there were discrepancies between the balance reflected in its records and the amount that the government requested. The lender larified that the irregularity only affected a specific group of government-linked accounts and does not affect other customers of the Chandigarh branch. IDFC First Bank Share Down The stock price of IDFC First Bank crashed following news of the suspected fraud. At time of writing the bank’s share already plunged to ₹68.79, down by 17.63% from the previous close of ₹83.51. The bank said that it will pursue strict disciplinary, civil and criminal actions against those involved in accordance with applicable law.
