New Delhi, February 23 Shares of IDFC First Bank plunged by 20% on Monday after the private sector lender disclosed a fraud of Rs 590 crore committed by its employees and others in accounts held by the Haryana government.
The stock plummeted 19.99% to Rs 66.85 – also its lower circuit limit – on the BSE.
The move came after the Haryana government de-empaneled 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 by 7.62% to hit an intra-day low of Rs 950.50 apiece on the exchange.
IDFC First Bank disclosed on Sunday a fraud of Rs 590 crore committed by its employees and others in accounts held by the Haryana government.
According to a circular issued by the finance department of the Haryana government, "IDFC First Bank and AU Small Finance Bank are hereby de-empaneled for government business in Haryana with immediate effect until 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 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 the 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 recognize any stress upfront.
